The AIM listed producer sees weaker demand in core markets
First-half profits at China Rerun Chemical Group have halved as a slowdown in China's automotive, industrial and agricultural markets caused sales to slide. The company reported pretax profit in the six months to the end of February had fallen to 16.3m yuan ($2.6m) from 32.7m ($5.3m) a year earlier.
Revenue had also dropped by 15% year-on-year to 139.7m yuan ($22.4m) from 164.7m yuan ($26.5 while gross margin was cut by 6% to just 24.9% during the same period. China Rerun sold seven million litres of products in the first half and was under extreme pressure from domestic competition to improve R&D and cut distribution expenses.
In a public statement, Executive Chairman, Wu Xinghe, said the company had been following its strategy of investing heavily in product development, human resources and equipment, but had seen a dramatic rise in costs over the period.