JIUTIAN Chemical posted a net loss of 162.3 million yuan (S$30.4 million) for the first half ended Jun 30, 2023, compared with a net profit of 385.6 million yuan in the corresponding year-ago period as falling chemical prices and competitive pressure dragged down results.

The loss came after three consecutive years of profit, since the financial year ended Dec 31, 2020.

The group recorded a 73 per cent fall in revenue to 393.1 million yuan, and a gross loss of 147.2 million yuan – compared with a gross profit of 530 million yuan a year ago.

Jiutian said that prices across all main products had a significant correction. The decline started in the fourth quarter ended Dec 31, 2022.

Demand softened across the industry due to slower-than-expected economic recovery in China. The average selling prices of dimethylformamide (DMF) and methylamine were 62 per cent and 63 per cent lower, respectively.

A new competitor, Jiangxi Xinlianxin Chemical Industry muscled in with additional capacity. It has a total DMF capacity of 200,000 tonnes per year compared to Jiutian’s 150,000 tonnes per year.

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Jiutian’s loss per share was 8.16 fen, compared with earnings per share of 19.39 fen in the year-ago period.

Chairman Han Lianguo said the group was not able to contain losses despite its efforts. It had adjusted production volume in H1, while continuing to supply strategically to long-term customers and protect market share. Han expects the business environment to remain challenging for the rest of the financial year.

The counter closed at S$0.046 on Thursday (Aug 3), down S$0.001 or 2.13 per cent.