Mainboard-listed Fabchem China has posted an 18.7% fall in net profit to RMB8.8 million ($1.7 million) for the second quarter of the financial year ending 31 March 2011(2Q2011). Fabchem is one of the leading manufacturers of initiation systems and detonating cords producers in China.

Revenue rose 7.1% to RMB90.9 million from RMB84.9 million. Sales in the group’s three traditional product groups of explosive devices, industrial fuses and initiating explosive devices, and industrial detonators remained relatively stable during the first half of its financial year. In particular, revenue contribution from ammonium nitrate business surged 93.9% year-on-year to RMB 61.99 million in 1H, thanks to wholly-owned subsidiary, Hebei Yinguang Chemical Co.

The group’s balance sheet remained healthy with total assets of RMB 517.66 million as at the end of September 2010. The group’s cash position remained stable with net cash balance of RMB 106.62 million.

Sun Bowen, Fabchem’s Managing Director, says: “Looking beyond the short term horizon, the group retains a cautious optimism about its longer term prospects. The group continues to adopt a prudent outlook for FY2011, during which it intends to continue to focus on costs containment and market diversification.”