12th Aug 2015 16:15
LONDON (Alliance News) - China Chaintek United Co Ltd Wednesday said its pretax profit halved in the first half of 2015 as it said market conditions in China worsened and it had to make rebate payments to its suppliers.
The Chinese consumer goods manufacturer said that its pretax profit in the six months ended June 30 declined by more than half on the same period the prior year, as its revenue fell by a quarter to CNY129.9 million from CNY173.8 million.
China Chaintek said its profit margin fell 77% due to rebate payments it paid to suppliers as well as from marketing expenses.
It added that market conditions significantly worsened during the period, with retail sales in the shoes and apparel sector slowing in China, while lower volumes combined with higher fuel prices hit its key suppliers, resulting in the company having to make rebate payments.
"As previously indicated in our final results, the group's operations has been facing pressure from the slowdown of the Chinese economy and the changes in the shoe and apparel manufacturers' business model. These factors, in addition to increased costs from our suppliers and the increased spending in advertising, have impacted the group's bottom line in the first half of the year," Chief Executive Xu Meijin said in a statement.
"The group, however is pleased that significant progress has been made in promoting the company and its development plans. In addition, the opening of the group's RDC in Changsha will continue to progress the group's aim of becoming a national logistics company," Meijin added.
China Chaintek will release its full results for the first half of 2015 in September.
Shares in China Chaintek closed down 8.8% at 15.50 pence on Wednesday.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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