Guizhou Tyre Co., Ltd. released the financial result forecast for the first three quarters of this year.
The company’s net profit is expected to be in the range of 6.5 million to 9.6 million yuan in Jan.-Sept., vs. 80.49 million yuan in the same period of last year.
The net profit for the third quarter is predicted to be between 57.12 million to 60.22 million yuan, vs. 14.97 million yuan in the same period of a year ago.
The figures show that Guizhou Tyre’s profit in the third quarter surges, preventing it from being lossmaking, but the business performance is still worse than the same period of last year.
Guizhou Tyre has summarized two reasons for the drop:
On the one hand, to stabilize market share and optimize inventory structure, Guizhou Tyre offered price-off promotions and boosted the sales volume, but the sales income and profit fell down.
On the other hand, Guizhou Tyre added the government compensation for house acquisition in current profits and losses in the third quarter, pushing up the profit.
Local government rebuilt shanty areas and acquired some of the houses of Guizhou Tyre.
The company received the first compensation for houses in July, valued at 150 million yuan.
When all the houses are acquired, Guizhou Tyre’s pretax profit will increase 266 million yuan.
Obviously, the amount of money played a positive role in making Guizhou Tyre’s financial results looking good.
