Jiutian Chemical Group has reported earnings of RMB51.3 million ($10.5 million) for the 3QFY2020 ended Sept 30, a surge compared to the RMB2.4 million reported a year ago.

The spike in earnings were mainly attributable to the continued recovery of China’s economy, which resulted in stronger demand for the group’s main products of dimethylformamide (DMF) and methylamine, with significant and steady rise in prices across the board.

Earnings per share (EPS) for the period stood at 2.86 RMB cents compared to the 0.13 RMB cents reported in 1HFY2019.

1HFY2020 revenue rose 9% y-o-y to RMB267.0 million due to higher selling prices of DMF and methylamine, while gross profit surged 342% y-o-y to RMB83.9 million mainly due to the decrease in purchase price per tonne of methanol, one of the key raw materials.

Gross profit margins for the period spiked to 31% from 8% in 3QFY2019.

Other income increased mainly due to one of income arising from disposal of scrap material.

As at Sept 30, cash and cash equivalents stood at RMB77.9 million.

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“We are pleased to see a continuing and significant rise in our quarterly net profits over the first nine months of FY2020. The strong results of 3Q2020, achieved despite a shorter operating quarter arising from a 20-day shutdown for routine maintenance in September 2020, are due to the continuing recovery of China’s economy, and a surge in demand for our main products of DMF and methylamine from downstream customers who in turn are experiencing strong growth in both local and export markets for their products,” says Jiutian’s chairman, Han Lianguo.

“We are also pleased to see a rising demand for our products from users in the lithium batteries and semiconductor sectors, which are experiencing strong and sustainable growth in China. Going forward, with our plants fully serviced in September 2020, we will focus on continuing to operate efficiently, and moving our utilisation rates higher to take advantage of the current favourable operating margins of our main products,” Han adds.

Shares in Jiutian closed 0.1 cent higher or 0.9% up at 11.5 cents on Nov 11.

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