Hainan Rubber expects 70% drop in 2024 profit despite higher NR prices

Shanghai – China’s Hainan Rubber Group expects a 73% year-on-year decline in net profit for 2024, despite higher sales revenue and volumes during the year.

The Chinese natural rubber (NR) major estimates net profit to come in Yuan80 million and Yuan120 million (€10-16 million), down from Yuan297.1 million reported the year before, according to a 27 Jan stock exchange filing.

The group linked the decline in profit to significant losses incurred by 'non-core activities, as well as typhoon Makar in September last year, which it said were not fully covered by insurance claims.

Such losses were partially offset by year-on-year price increases, said the group in its 2024 earnings forecast.

“The company actively expanded its end-market business and capitalised on the premium pricing advantage of EUDR-compliant products,” it added.

Such moves, it said, boosted sales volume and selling prices of natural rubber products, leading to higher revenue and gross profit.

Additionally, the group said it has intensified cost-reduction and efficiency-improvement measures.

Measures include centralised procurement, refined management, and stricter budget controls.