31st May 2016 09:04
LONDON (Alliance News) - HaiKe Chemical Group Ltd, an AIM-listed chemical company based in Shandong Province, China, on Tuesday said 2015 was a "challenging year" due to depressed oil prices and "fierce" competition in the isopropyl alcohol market.
"Depressed oil prices and an oversupply of mid to lower-end specialty chemicals had a negative effect on our selling prices and eroded our average margins," HaiKe Executive Chairman Xiaohong Yang said in a statement.
To "counteract" a weak market and "better position" the business, Yang said, the company decided in the third quarter to focus on higher-margin specialty chemical products, new product development, and tighter cost controls.
Those steps began to deliver an improved performance in the fourth quarter, according to the chairman, who said that "has satisfactorily continued into the first four months of 2016".
"Looking forward, we expect the operating environment to remain challenging and our focus therefore is to continue to innovate new specialty chemical products and evolve our product mix in order to optimize our performance," Yang said.
Although that required an initial cost, the company said the positive results of doing so began to "be evidenced" in the fourth quarter.
The update came as HaiKe Chemical said pretax profit from continuing operations in 2015 amounted to CNY5.8 million, versus CNY8.7 million a year earlier, with revenue down 25% to CNY727.5 million from CNY973.3 million.
As was the case a year earlier, no dividend was declared.
Shares in HaiKe Chemical were up 33% to 13.00 pence on Tuesday morning in London.
By Samuel Agini; [email protected]; @samuelagini
Copyright 2016 Alliance News Limited. All Rights Reserved.