Zoomlion profits continue to slide in H1 2016
Chine state-owned giant sees no end in sight for Chinese equipment depression, though streamlining and new revenue streams should improve H2 results
Zoomlion Heavy Industry Science and Technology Company has estimated that it made a loss of between $120m (RMB 800 million) and $130m (RMB 870 million) during H1 2016.
The state-owned Chinese construction equipment manufacturer, which recently abandoned its $3.3bn bid for US cranemaker Terex, attributed its loss to the lack of any significant improvement in the market demand in China’s construction machinery.
It added noted that a programme to transform its marketing model in the construction machinery sector to increase its operating efficiency together with streamlining to reduce labour costs was currently producing costs due to the pay out of due to ‘loss of earnings’ compensation.
In the second half of the year, however, the company expects these costs to be significantly reduced, while activity in the emerging sectors of agricultural machinery and the environmental industry are expected to increase in turnover and improve Zoomlion’s cash flow.