Prosperity Minerals Holdings, which has just sold its Chinese cement business for GBP 300m, reported higher 1H revenues and profits amid what the company said was a challenging economic environment, now looking to take advantage of the massive cash inflow to develop other businesses in China.
Revenues for the six months to September 30th2009 surged by 33% to US$491.4m as gross profits climbed 22% to US$30.2m. However, pre tax profit declined 91% to US$1.3 million and EBITDA were down by 35% at US$18.8m.
The group continued to be negatively affected by the economic downturn, which propelled an overall decline in cement, steel and iron ore prices. However, both the cement and iron ore trading businesses still performed well, largely due to high levels of demand from China, which began to experience the full effect of the government’s USD 586 billion stimulus package.
The group is expecting to derive further benefits from China’s stimulus programme, also noting that iron ore operations are picking up as spot prices for iron ore and ocean freight rates have increased over the past two months, which is expected to reduce the reliance of steel mills on imports.