HaiKe Chemical Group, the AIM quoted petrochemical, speciality chemical and biochemical business based in China, saw its share price dive 15.5 per cent after revealing that for the first five months in the current year, the sales volume of HaiKe's major products declined by between 50-70 per cent.
This was due to weak market demand and closure of the refineries for planned maintenance occurring earlier than in 2011. The average realised price movement varied for different reasons: diesel and gasoline prices grew by 12% and 26% year-on-year, respectively, pushed up by feedstock costs; chemical product price fluctuations were mainly driven by the varying market demand. As a result, turnover decreased by 13% year-on-year and the accumulated loss increased for the first five months of this year.
The firm said management has taken several measures to improve earnings performance in the second half of the year, including cost reduction and proactively promote better sales and marketing initiatives.
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The weak trading environment was blamed for much of the decline, with the price cut to refined products retail prices unable to turn around and stimulate sales due to weakened demand caused by a slowing domestic economy.
The share price fell 4.50p to 24.50p by 13:21.
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