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Analysis on Linglong Tire's operation in Q1'2018

On April 27, Shandong Linglong Tire Co.,Ltd released its operation data of first quarter in 2018.

Statistics showed that Linglong Tire produced 12,836,000 units of tires and sold 12,364,700 units, realizing 3.485 billion yuan of sales revenue.

The company posted 3.512 billion yuan of operation income in the first quarter, year-on-year rising by 4.08%, and gross profit lifted 8.58%, comparing net profit decreasing 12.08% to 224 million yuan.

Linglong Tire said that the company's operation was getting better in the first quarter of 2018, and its cash flow turned to green.

Foreign Exchange Rates hauls net down

Linglong Tire said that USD to CNY decreasing created 120 million yuan of exchange loss for the company. Adding to financing cost rising,there was 20 million yuan of interest expenditure increased at the same time, and 28 million yuan of assets devaluation, which hauled the company's net profit dawn.

Raw materials soaring

In the first quarter of 2018, Linglong Tire price increased 0.14% compared to the fourth quarter of 2017.

The company said that except rubber price, other raw materials showed uprising trend in the first quarter.

It is said that in the first three months of 2018,natural rubber price decreased 4.5%, compared to the fourth quarter of 2017, and synthetic rubber price down by 6.33% at the same time. But carbon black price increased 5.85%, and steel cord up 6.47%, cord fabrics up 2.77%.

The company said tire production order would increase in the second quarter, and it would increase its USD debt to offset exchange loss.