Citic Forecasts Full-Year Loss on Currency, Weak Commodity Price

Citic Resources Holdings Ltd. (1205), the commodities trader controlled by China’s largest state-owned investment firm, may remain unprofitable for the second straight year because of lower commodity prices, higher costs and foreign-exchange losses.

The company expects to report a net loss in the 12 months ending Dec. 31 as prices fell amid weak recovery in global demand, according to a statement today. Losses from fluctuations in the Australian dollar’s exchange rate and a one-time expense of HK$91.5 million ($12 million) incurred to repurchase part of its senior notes due 2014 contributed to the forecast deficit, it said.

Citic Resources, 59 percent owned by Citic Group Corp., is a provider of natural resources including coal and aluminum. Coal prices in Newcastle in Australia, an Asian benchmark, have fallen 12 percent in 2013, compared with last year, while prices of the lightweight metal declined about 8 percent on the London Metal Exchange in the same period.

The shares of Citic Resources fell 2.9 percent to close at HK$1.01 in Hong Kong. The stock has fallen 15 percent this year, compared with a 1.2 percent gain in the key Hang Seng Index.

To contact the reporter on this story: Abhishek Shanker in Mumbai at ashanker1@bloomberg.net

To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.