News

Haike Chemical slumped after the petrochemical firm warned revenues will be at the lower end of expectations and that it will report an overall net loss for the year to December 2008.

The group said throughout the current year, cost of sales of the petrochemical business has been affected by volatile raw material costs, which have had and continue to have an adverse impact on its overall profitability.

"This has been exacerbated in recent weeks by the rapid decrease in the price of crude oil, and consequently in the selling prices of refined products, at a time when the Company has committed to taking a large volume of crude oil at a price which is now higher than the prevailing market price," it said.

There was a 26% fall in overall sales during the third quarter of 2008 compared with the same period last year due to the temporary shut down of its oil refinery facilities in July and August 2008. But overall group revenue rose 74% for the first nine months of 2008.

It said the speciality chemical and biochemical businesses continue to trade in line with expectations and further growth is expected for the remainder of the year.

"The outlook for 2008 and beyond for the speciality and biochemical businesses remains very positive, boosted by the capacity expansion projects we have completed and the robust demand for our products," it said.

"HaiKe will continue to shift the weighting of its operations to these areas where the management foresees significant opportunity to deliver further growth and to enhance shareholder value," added the group.