Jiutian Chemical Group has announced a net loss of RMB 32.2 million ($6.5 million) for quarter ended 31 March 2010 (1Q2010), compared to losses of RMB 21 million in 1Q2009 and RMB 42.2 million in 4Q2009.

Revenue for 1Q2010 at RMB 127.3 million, was 228% higher than 1Q2009 and 39% higher than 4Q2009, against the backdrop of a gradual improvement in trading conditions.

The increase against 1Q2009 was due to the resumption of Anyang Jiuyang’s 120,000 annual tonnes capacity DMF (Dimethylformamide, a common solvent) plant since October 2009 against 1Q2009 where this plant was shut and only Anyang Jiutian’s 30,000 annual tonnes capacity DMF plant was operating.

Selling prices for 1Q2010 was also marginally higher than 1Q2009 despite the significant increase in sales volumes, a welcome signal as the DMF industry continues to increase its plant utilisation further reinforcing that the global economy is on a recovery albeit at a gradual pace.

Notwithstanding the significantly higher sales volumes, at the gross profit level, the loss in 1Q2010 at RMB 26.6 million was 155% higher than 1Q2009 but 24% lower than 4Q2009.

The higher loss against 1Q2009 was largely due to the higher raw material costs from its key supplier Anhua which took effect from May 2009 following the expiry of the group’s three-year supply agreement with Anhua.

The lower loss against 4Q2009 was largely due to the resumption of Anyang Jiutian’s methanol facility following the improved selling prices and the lower production costs at the Anyang Jiuyang plant.