For the first half of the 2012 financial year, Giti Tire Corp. has reported revenue of RMB 2.06 billion, a year-on-year decrease of 7%.
The Giti Tire Pte. Ltd. subsidiary says this decline was a combined effect mainly attributable to decrease in sales volume and increase of average selling price. Lower sales mainly reflected a slowdown in China related to the construction and property sectors, coupled with measures undertaken by the Chinese government to restrict credit availability. The export market decrease was largely brought about by the financial crisis in European markets, Giti Tire Corp. added.
Despite lower sales, during the first six months of 2012 the company’s gross profit rose 98.9% year-on-year to RMB358 million, while gross profit margin for the reporting period was 17.3%, compared with 8.1% in the first half of 2011. The increase in gross profit was mainly attributable to lower raw material costs. Giti Tire Corp. generated a net profit of RMB143 million in the first half 2012, up from RMB32 million a year earlier, while net profit margin for was 6.9%, compared 1.4% in the first half of 2011.
The company also incurred higher finance expenses during the period due to higher cost of borrowings compared to the first half of 2011 and decrease in foreign exchange gain recognized during the period, mainly attributable to a strengthening U.S. dollar and weakening euro against China’s currency during the period.
Giti Tire Corp. holds 51% of Giti Tire Pte. Ltd’s interest in Giti Tire Fujian, one of seven tire manufacturing plants owned by the group. Giti Tire Fujian was established in 1995 and manufactures PCR and TBR tires. The other locations where Giti operates plants are Giti Tire Anhui (founded 1993, produces TBR and PCR tires), Giti Tire Chongqing (acquired 2002, produces TBR tires), Giti Tire Yinchuan (acquired 2002, produces TBR and cross-ply tires) and Giti Tire Hualin (acquired 2003, produces PCR, TBR and cross-ply tires). (Tyres & Accessories)
