Hong Kong — After-tax profits at polyurethane foam and bedding company Sinomax fell fall by HK$49.6 m ($6.3 m), or 49%, to HK$51 m in 2017, the company said in an announcement.
The company said the fall in profit was a result of the high price of TDI during 2017.
Sinomax issued a profit warning in mid-March.
Sales revenue in 2017 was up by 19% on 2017 to HK$4.18 bn. Cost of sales grew by 25% between 2016 and 2017. In 2017 cost of sales was HK$ 3.35 bn. This wiped out much of the gains from higher revenue.
Sinomax reported 2017 sales into the local China market were HK$1.9 bn identical to the 2016 amount.
Sales in the North American market grew by over 20% to HK$1.75 bn in 2017 compared to HK$1.5 bn in 2016. Sales in the US grew by 15% from HK$1.4 bn in 2016 to HK$1.6 bn in 2017.
In the rest of NAFTA, sales grew from HK$ 83 m in 2016 to HK$128 m in 2017. Sales growth in North America would have been higher if a sales project with a customer had happened sooner, the company added. Trial runs of the US subsidiary led to a gross loss of HK$71.5 m in 2017, the company said.
European sales for 2016 were restated and fell from HK$91 m in 2016 to HK$73 m in 2017. A drop of 18%.
Looking to 2018, Sinomax said it expects that price of TDI will become stable. It will continue to upgrade machinery and expand production.
Sinomax added that its facility in Shandong started operation in the third quarter of 2017.
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