30th Sep 2013 08:47
LONDON (Alliance News) - Chinese Medicine raw material supplier Taihua PLC Monday said it swung to a profit in the first half of the year as the yuan strengthened against the pound and a substance derived from its yew tree plantations returned to profit, but revenues declined sharply as sales of Homoharringtonine continued to decline.
The company reported a net profit of CNY548,000 for the six months to end-June, compared with a CNY101,000 loss a year earlier as it booked a foreign exchange gain of CNY627,000 compared with a loss of CNY30,000 a year ago.
However, its pretax loss, which excludes the foreign exchange impact, widened to CNY79,000 from CNY71,000 as revenues declined to CNY5.4 million from CNY6.5 million.
It said it had generated a small profit from Paclitaxel as a jump in sales offset a slide in the selling price, but sales of Homoharringtonine continued to decline.
"Whilst the volumes have fallen considerably in the past two years the company intends to remain in the business of Homoharringtonine supply as there is still, in the opinion of the Board, the possibility that volumes may recover," it said in its earnings statement. "Homoharringtonine has always been a relatively high Gross Margin % product and any upturn in volumes would have a significant positive profit effect."
The company said its cash position remained stable during the half and it had CNY40 million of cash at the end of the period, a position it expects to increase in the second half when it does most of its harvesting and sales.
Taihua shares were down 9.1% at 3.75 pence Monday morning.
By Steve McGrath; [email protected]; @SteveMcGrath1
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