SHANGHAI, Aug. 15 (SMM)--According to Shengyang Corp’s semiannual report, the company realized sales revenues of RMB 388.968 million during 1H, up 24.18% YoY, with net profits of RMB 21.307 million, up 12.90% YoY.
The company’s sales income is generally in line with expectations, with its primary battery business generating sales income of RMB 382.48 million, up RMB 24.57% YoY. Business income increases were mainly driven by strong demand from the lead-acid battery industry. Income from finished batteries and accessories came to RMB 382.48 million, with costs at RMB 314.29 million, yielding gross profits of 17.83%, down 4.17% YoY.
According to the report, the company’s sales revenues rose during 1H, but margins narrowed given rising raw material costs, causing gross profits to fall. In early 2011, lead prices surged to RMB 17,800/mt on the bourse, up from RMB 17,000/mt after the Chinese New Year holiday. Although lead prices fell in late April, prices of other raw materials such as antimony and sulfuric acid also rose. As such, raw material costs at the company rose significantly during 1H.
Inspections in May for environmental protection have impacted lead-acid battery producer significantly, with many medium and small size enterprises closed and even scale-efficient lead-acid battery producers shut down for inadequate public safety exclusions zones. The effects on Shandong Shengyang Power Sources Industry Company from this round of environmental protection inspections, however, were limited, and with orders increasing significantly, gross profits are expected to rise in 2H.
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