China Hainan Rubber Industry Group (601118) H1 2024 earnings summary

Executive summary

• Revenue for H1 2024 reached RMB 19.21 billion, up 31.61% year-over-year, driven by higher sales volume and prices of rubber products.

• Net loss attributable to shareholders was RMB -296 million, slightly higher than the prior year, with EPS at -0.0693.

• Core business performance improved, with adjusted net profit (excluding non-recurring items) up RMB 132 million year-over-year.

• The company remains the world's largest natural rubber producer, processor, and trader, with global sales volume over 3.8 million tons.

• Strategic focus on cost reduction, efficiency, and digital transformation led to cost savings of RMB 80 million in H1.

Financial highlights

• Operating income rose 31.61% year-over-year to RMB 19.21 billion; operating cost increased 31.26%.

• Net loss attributable to shareholders was RMB -296 million, with basic and diluted EPS at -0.0693.

• Net cash flow from operating activities was RMB 233 million, reversing a negative flow last year.

• Total assets at period end were RMB 35.05 billion, up 3.25% from year-end 2023.

• Gross margin remained under pressure due to higher unit costs and increased interest expenses.

Outlook and guidance

• The company expects global natural rubber demand to grow 3.1% in 2024, with China demand up 5.5%.

• Will continue to focus on core business, cost control, and expanding EUDR-compliant product sales.

• Plans to further digitalize operations and enhance risk management in the second half.