China’s Zoomlion Heavy Industry Science and Technology Co Ltd warned its first-half net loss would more than double due to weak demand for construction machinery and unfavorable currency rates, pushing its shares lower on Friday.
Reuters reports, Chinese heavy equipment makers are battling a historic glut of unsold equipment following a massive construction boom initiated by a $644 billion government stimulus package announced in 2008.
Zoomlion estimated its net loss for January-June at 800 million yuan to 870 million yuan (($120 million – $130 million), compared with a 309.8 million yuan loss in the same period last year.
The loss per share was estimated at 0.10-0.11 yuan compared with a 0.04 yuan loss a year ago.
“Despite the year-on-year increase in property investment and in areas (where) construction newly commenced in China, there is no significant improvement in the market demand in construction machinery,” Chairman Zhan Chunxin said in a statement.
The company’s Hong Kong listed-shares fell around 3 percent in early trade, compared with a flat benchmark Hang Seng Index. They have slid nearly 13 percent so far this year after plunging 51 percent last year.
Zoomlion said, however, operating cash flow improved from a year ago.
In May, the company dropped its $3.4 billion bid for U.S. crane maker Terex Corp after failing to agree on terms, clearing the way for a smaller deal between Terex and Finland’s Konecranes.
(Reporting by Donny Kwok; Editing by Stephen Coates and Edwina Gibbs)
