27th May 2015 13:06
LONDON (Alliance News) - GTS Chemical Holdings PLC Wednesday reported a significant rise in pretax profit in 2014 as its two main divisions experienced significant growth over the year, and the company said it will continue investing to increase production capacity which will supply further growth in 2015.
GTS shares were up 6.1% to 61.00 pence per share on Wednesday afternoon.
The chemical and lubricant oil company operating in China reported a rise in pretax profit to CNY102.4 million in 2014 compared to a CNY76.5 million profit in 2013 as revenue climbed to CNY704.6 million from CNY482.9 million.
That led to the company announcing its maiden dividend of 1.8 pence per share for the full year.
Its speciality chemical business delivered revenue growth of 24% compared with the previous year, driven largely by the demand from the paper industry, as production of paper from straw continued to grow, supported by Chinese government initiatives.
The lubricant oil business saw sales almost treble, partially because 2013 did not represent a full year, as sales began only in July 2013. Comparing the second half of 2014 and 2013, sales grew by 61%. The lubricant oil business has continued to grow in 2015, and the company said it will invest further in the division toward the end of 2015 to double its production capacity.
The recarburizier division was similar to the lubricant division in that it did not begin sales until July 2013. In 2014, sales more than doubled but in the second half of the year, sales dropped 2% which the company said was "consistent" with its strategy. GTS said the division is and will remain a small part of the overall business.
Overall expenses increased at a slightly faster rate than revenue mainly due to labour cost increases, largely resulting from the enlarged Lubricant Oils sales team, it said.
"The outlook for our core business segments is strong. Growth in Speciality Chemicals continues to be underpinned by our contract with Tralin Paper, which is continuing with its own expansion plans, and by the expansion of other customer networks," GTS said. "We also expect the growth in Lubricant Oils sales to continue to rise as we increase our distributor network and brand recognition".
"We intend to continue to expand our production facilities, during 2015 we intend to commence construction of a lubricating oil production line on the newly acquired land, as well as expanding our speciality chemicals facilities on the existing site," said GTS.
By Joshua Warner; [email protected]; @JoshAlliance
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