Profits fall at large Chinese tyremakers

The total profits of seven Chinese tyre makers fell in the first half of 2011 compared to a year ago, despite higher revenues. The seven tyre makers included Double Coin Holdings, Aeolus, Qingdao Double Star and ST Yellow Sea. Yellow Sea was reportedly the only one of the seven to report a overall loss, according to news reports.

Data published by local industry association CRIA shows that total sales increased by around 26 per cent to 23.234 billion yuan (2,650 million euros), up from 18.408 billion yuan a year ago. However, net profits fell by 18 per cent, to 352 million yuan, compared with 432 million yuan a year earlier. This means the combined net profit margin fell to 1.5 per cent, from 2.4 per cent.

Another separate analysis of the steel cord business showed a similar picture, with total revenues up by around 5 per cent to 6,005 million yuan (685 million euros), from 5,747 million yuan. Net profits declined to 576 million yuan from 774 million yuan. Margins in the steel cord business were said to be higher at 9.6 per cent, down from 13.5 per cent reported last year.