Qingdao, China – Chinese tire maker Doublestar recorded a €7.6 million (58 million yuan) net loss in the first quarter of 2020, compared with €2 million net profit registered during the same period last year.
Revenue during the first three months slumped 28% year on year to €104 million, said the company’s financial statement in April. Net loss less non-recurring items stood at €9 million, compared with €5 million net loss a year ago.
“Upon coronavirus impacts, downstream companies are slowly resuming work while logistics are [still] hindered in China and overseas," said the report.
In addition, orders from domestic and foreign markets have been postponed or scaled down while fixed cost are higher due to low plant utilisation rates, the company added.
In 2019, Doublestar posted a €35 million net loss, compared to €4 million net loss in the prior year. Revenue still rose 10% to €538 million compared to 2018.
Net loss less non-recurring items reached €63 million, compared with €53 million in 2018, said the company’s annual report released in April.
Last year the company sold 11 million unit tires, up 14% from 2018, accounting for 92% of total revenue. Machinery sales accounted for 6%.
Doublestar’s domestic sales dropped 10% in 2019, but overseas revenue rose 24% to €210 million in 2019. Its gross profit margin for overseas markets stood at 9.4%, two percentage points higher than the Chinese market.
The company’s research expenditure increeased by 55% in 2019 to €25 million, due to “tire product upgrades and the company’s expanding high-end smart machinery business,” said the report.