8/19/2011 1:19:00 AM
NEWS BRIEFS
Gem-Year Cuts Profit Forecast on High-Speed Rail Uncertainty

China fastener manufacturer Gem-Year Industrial cut its profit forecast by 50% for the first three quarters of 2011 due to uncertainties in the high-speed railway parts market, reports yicai.com.
 

In an interim report Gem-year said high-speed train accidents happen frequently and have affected related parts biddings and existing contracts settlements.
 

In the first half, Gem-Year’s net profit fell 12.05% to 105 million yuan despite 21% revenue growth to 1.54 billion yuan. First-half fastener revenue rose 24.77% to 443.73 million yuan, while revenue from high-speed railway parts slipped 7.29% to 485.25 million yuan. 
 

Higher labor, material and energy costs also cut into earnings.

Gem-Year’s orders for high-speed rail fasteners topped RMB$1.9 billion (US$285 million) in 2010, according to the China Railway Department. 

The construction of high-speed rails is expanding in China. By 2015, the length of high-speed rails in the country will reach 16,000 meters and grow to 24,000 meters by 2020.  

“It is predicted that the present orders can already cover the income of RMB$1-1.2 billion in 2010 and RMB$1.2 billion in 2011,” according to Fastener World. ©2011 GlobalFastenerNews.com

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