Jade Technologies Holdings, the titanium dioxide manufacturer and distributor in China, reported a modest net profit of RMB 866,000 ($168,243) for the three months ended December 31, 2010 (1QFY2011) compared to a loss of RMB 3.4 million for the same corresponding period (1QFY2010).
This was achieved on the back of a significant improvement in revenue to RMB 36.2 million in 1QFY2011 from RMB 1.2 million in 1QFY2010, with the commencement of the group’s selling and distribution of titanium dioxide in mid-December 2009. In addition, for the period under review, the average selling price of titanium dioxide was RMB11,030 per ton as compared to RMB 9,435 in the previous corresponding period.
As a result of the increase in revenue, gross profit increased to RMB 6.7 million in 1QFY2011 from RMB 410,000 in 1QFY2010. Gross profit margin however dipped to 18% due to lower sales volume achieved in November and December 2010. This was due to a fall in the supply from the group’s supplier -- Daqing XinLong Chemical Company.
On October 4, 2010, Jade signed a letter of intent to purchase 100% equity interest in XinLong, as a strategic move that will give the group a strong manufacturing base.
Jade says this proposed acquisition will not only help Jade in its growth and expansion plans but also improve its business model.
The company expects to remain profitable in FY2011.
