Zoomlion Boosts Profit on Concrete Pumps; Sany Earnings Fall
Stock Chart for Zoomlion Heavy Industry Science and Technology Co Ltd (000157)
Zoomlion Heavy Industry Science & Technology Co. (1157), China’s second-biggest maker of construction equipment, boosted first-half profit 21 percent after raising its share of the concrete-machinery market and boosting exports.
Net income rose to 5.62 billion yuan ($885 million) from 4.63 billion yuan a year earlier, the Changsha, China-based company said in a Hong Kong stock exchange filing yesterday. Larger rival Sany Heavy Industry Co., also based in Changsha, posted a 13 percent profit drop on slumping excavator sales.
Zoomlion’s revenue jumped 21 percent as new products, greater customer credit and overseas sales helped it weather a “longer than expected” slowdown in domestic demand. Sany, along with Caterpillar Inc. and Hitachi Construction Machinery Co., has cut production of diggers in China as an equipment glut and waning construction damp demand.
“The growth of the construction-machinery industry will slow down” in China, Zoomlion said. “The export of domestic construction-machinery products will continue to increase.”
Sany, which is more reliant on excavators than Zoomlion, said net income dropped to 5.16 billion yuan from 5.94 billion yuan in a Shanghai stock exchange filing, citing domestic accounting. Sales rose 4.6 percent to 31.8 billion yuan. Revenue from excavators, the second-largest segment, fell 6 percent to 6.6 billion yuan.
Sany’s overseas sales more than doubled to 3.3 billion yuan, helped by demand in emerging markets. The company also bought Putzmeister Holding GmbH, Germany’s largest cement-pump maker, for $653 million, including debt, in April.
Zoomlion’s profit from concrete machinery, its biggest unit, rose 52 percent to 6.12 billion yuan. The company’s trade receivables, after provisions for impairments, jumped 63 percent to 18.9 billion yuan.
Revenue rose to 29.1 billion yuan. Overseas sales jumped 27 percent, helped by the introduction of truck-mounted concrete pumps in Germany and crane sales in Iran. The company didn’t break down sales by region.
Zoomlion has fallen 1.1 percent this year in Hong Kong trading. The benchmark Hang Seng Index has risen 6.1 percent. Sany, which delayed plans for a Hong Kong share sale last month, has dropped 18 percent in Shanghai.
Zoomlion is trying to sell its sanitation-equipment unit to focus on construction machinery. The company this week extended the deadline for bids to as late Dec. 31 in the expectation of finding a buyer.
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