China Fibretech nosedives into a $97.4m loss

Blame it on skyrocketing operating expenditures.

The past quarter is not as smooth as silk for China Fibretech as it recorded a whopping net loss of $97.4m (RMB466.9m) from a profit of RMB1.9m last year. According to the group, this came as revenue decreased to RMB7.6m as compared to RMB18.3m due to the decline in the fabric processed 1,030 tonnes.

"Decrease in average fabric processing fee from RM8,023 per tonne in 9M2015 to RMB7,361 per tonne in 9M2016. Changes in product mix had also contributed to lower average processing fees due to higher proportion of polyester, spandex and cotton processed during the period which commands a lower processing fee," the group explained.

However, the huge blow on bottomline was due to the skyrocketing operating expenses, which saw a 236,702.0% increase in 3Q16 to $466.5m.This is mainly attributed to the compensation claim totalling of RMB470.4 million was paid to the three claimants.

Looking forward the group expects a challenging 2016 for its dying business.

"The China textile industry remains uncertain as output had been slow due to domestic factors and weak recovery from the international market. The effect of various domestic factors such as rising costs from cotton prices and labour costs, has a direct and/or indirect effect on our customers and consequently in their demand for our service," the group said.