Aeolus swings to third quarter loss on rising costs, Prometeon investment

Jiaozuo, China – Aeolus Tire swung to a third-quarter loss as rising raw-material costs and losses from its investment in Prometeon Tyre Group weighed on earnings.

The Chinese tire maker reported a net loss attributable to shareholders of Yuan24.4 million (€3.3 million), compared with a profit of around Yuan121 million a year earlier.

Revenue declined 7.6% year-on-year to Yuan1.87 billion, according to the group's financial report published 31 Oct.

Aeolus attributed its weaker performance mainly to a "sharp increase in prices of major raw materials" and an investment loss relating to associate Prometeon Tyre Group.

The group said its combined purchase prices for major raw materials rose 15.3% year-on-year, placing significant pressure on production costs.

As a result, gross profit margin fell 5.52 percentage points to 11.23%.

Aeolus also recognised a Yuan22.6 million investment loss from Prometeon during the quarter.

Excluding that impact, the manufacturer said its quarterly pre-tax loss would have been Yuan3.8 million.

For the first nine months, Aeolus reported a 63.3% decline in net profit to Yuan82 million, despite a 2.3% increase in revenue to Yuan5.67 billion.

The Chinese group attributed the decline to higher raw-material prices and increased foreign-exchange losses following currency fluctuations.

Its nine-month gross profit margin fell 2.31 percentage points to 13.27%.