Oct. 29 (Bloomberg) -- Sany Heavy Industry Co., China’s biggest machinery maker by market value, posted a 59 percent drop in third-quarter profit as the nation’s slowing economic growth sapped demand for excavators and concrete pumps.
Net income in the three months ended Sept. 30 declined to 714 million yuan ($114 million) from 1.73 billion yuan a year earlier, the Changsha, China-based company said in a filing to Shanghai stock exchange today, citing domestic accounting standard. Sales fell 18 percent to 8.9 billion yuan.
Sany, along with Caterpillar Inc. and Hitachi Construction Machinery Co., has cut production of diggers in China amid an equipment glut and a seven-quarter slowdown in economic growth. The company’s excavator sales, its second-biggest revenue contributor, fell 27 percent to 2,034 units in the quarter, according to data compiled by Nomura Holdings Inc.
Accounts receivables jumped 83 percent to 20.7 billion yuan as of Sept. 30 from nine months earlier, as payments slowed amid the “current macro-economic situation,” Sany said. China’s gross domestic product expanded 7.4 percent in the third quarter, the seventh straight deceleration.
Sany fell 0.6 percent to 9.11 yuan in Shanghai trading before the results were released. The stock has slumped 27 percent this year.
The company earlier this month said it would lower bad debt provision ratios, effective from July. The move may boost earnings in the first nine months by 470 million yuan, it said in a stock exchange filing.
Sany’s first-half profit fell 13 percent to 5.16 billion yuan. That was lower than rival Zoomlion Heavy Industry Science & Technology Co.’s 5.62 billion yuan. Zoomlion is due to report its third-quarter earnings tomorrow.
To contact the reporters on this story: Jasmine Wang in Hong Kong at Jwang513@bloomberg.net
To contact the editor responsible for this story: Neil Denslow at email@example.com