Loften Aluminum Foil’s 2011 Net Profit Plummets 67.75%

SHANGHAI, Mar. 29 (SMM) -- Shandong Loften Aluminum Foil Co., Ltd. released the 2011 annual report recently, saying its operating revenues were RMB 1,793,569,900 in 2011, up 75.52% YoY; operating profits were RMB 11.10 million, down 76.66% YoY; and net profits attributable to shareholders of listed company were RMB 11.78 million, down 67.75% YoY.

There are three reasons behind the plunge in Loften Aluminum Foil’s net profit in 2011. First, domestic aluminum prices were higher than overseas prices in 4Q 2011 amid European debt crisis and other international and domestic macroeconomic factors, reducing the company’s profit margin. Second, Qingdao Runfeng Aluminum Foil Co., Ltd., a subsidiary of Loften Aluminum Foil, put its 50,000 mt/yr aluminum foil production line into operation, with construction in progress transferred into fixed asset. This project entered operations later than expected, leading to higher fixed cost. Third, the company’s financial cost in 2011 surged on account of its growing loans and increasing interest rates.