Yingde Gases Group Company Limited’s profit tumbled by 126.7% in its 2016 full-year financials, dropping from an income of RMB 536m ($78m) in 2015 to a loss of RMB 143m ($21m).

The net loss stems from impairment losses on plant, equipment and construction in progress as its profit from operations fell by 27.5% from RMB 1.9bn ($276m) to RMB 1.4bn ($204m). As at 31st December 2016, Yingde had a total of 70 facilities in operation and 13 under development.

However, Yingde’s revenue increased overall by 6.1% to RMB 8.4bn ($1.2bn) from RMB 7.9bn ($1.1bn) the year prior. The surge is mainly attributable to the start-up of two new onsite facilities and increased merchant sales and process from the provision of construction and operating services for downstream customers.

During the fiscal year, the group sold 27 billion Nm3 of industrial gases, representing a growth of 12.5% compared with last year. This is as a result of Yingde further diversifying its customer base into enterprises in industries including chemical, nonferrous metal, electronics and energy, as well as expanding into new geographic regions.

Total sales of oxygen (O2) products, nitrogen (N2) products and argon (Ar) products were 12 billion Nm3, 11 billion Nm3 and 255 million Nm3, respectively. Total installed capacity is expected to exceed 2.3 billion Nm3 per hour in 2018 when the construction of all facilities under development is completed.

As the largest independent onsite industrial gas supplier in the People’s Republic of China, Yingde claimed a domestic market share of 34.5% in 2016. In its full-year financials, the revenue of the group’s onsite gas supply business amounted to RMB 7bn ($1bn) – an increase of 2% compared with the year prior.

currency finance china copyright jmiks

Source: jmiks

Onsite gas supply accounted for approximately 83.5% of Yingde’s revenue, mainly contributed by customers from steel, chemical and nonferrous metal industries. In addition, the Chinese outfit entered into three new long-term onsite supply contracts.

Revenue from the group’s merchant gas operation also climbed, increasing by 15.8% to RMB 955m ($139m). The company attributes its 18.8% increase in the sales volume of O2 to the recovery of the domestic metal processing industry. Additionally, it recorded an increase of 23.8% in Ar sales due to the strong recovery in China’s stainless steel industry.

Looking ahead, the company said it will focus on cash flow generation, improvement of operation efficiency, and optimisation of its capital structure in 2017.

Tier One player Air Products put in a bid to acquire Yingde in January, but the offer was taken off the table last month saying it was “not in the best interest of Air Products’ shareholders.” The bid came at a fractious time for the Chinese company, amidst an internal company feud between two groups of current and deposed Directors.