Chinese tire manufacturer Sentury, which is poised to launch a new factory in Morocco in Q3 of 2024, reported an operating profit of approximately 580 million USD (4.11 billion yuan) in the first half of 2024, a 16% increase over last year, according to news reports. Its net profit so far this year is 153 million USD (1.08 billion yuan), up by 78%.
In Q2 of 2024, the company’s revenue totaled 280.4 million USD (1.99 billion yuan), reflecting 6% growth over last year at the same time.
Demand outside China for the company’s semi-steel tires continues to rise, while domestic market demand remains relatively stable.
For H1 of 2024, the company’s international exports and revenue increased by 21% year-over-year, reaching 516 million USD (3.66 billion yuan), an 89% increase in revenue.
The company also expects this positive trend to continue, with its 12 million tires semi-steel tire project in Morocco expected to be operational by Q4 of 2024.
The company’s manufacturing facility in Morocco is anticipated to contribute to new profit growth areas.
Given the ongoing strong growth in overseas semi-steel tire sales and the imminent commencement of production at the Moroccan facility, Sentury’s operating profits for 2024, 2025, and 2026 are projected to be 9.8 billion, 11.8 billion, and 13.8 billion yuan respectively, with growth rates of 24%, 21%, and 17%.
Net profits are expected to be 2.2 billion, 2.8 billion, and 3.4 billion yuan, with growth rates of 64%, 23%, and 24% respectively.
The company also noted several challenges, including slower-than-expected progress on construction projects, lower-than-anticipated tire exports to foreign markets, a significant increase in raw material costs, weaker-than-expected downstream demand, and higher dumping penalties and transportation fees.
To address these challenges, Sentury announced in July that the dividend distribution rate for this year is low due to the ongoing financing of the Moroccan factory. The company seeks to increase dividends after the factory’s launch in Morocco.
“The current lack of production capacity has become a significant factor limiting the company’s future development,” the company noted.
“Currently, the company is fully focused on advancing the Morocco project” to become operational in the third quarter of 2024, according to Chinese sources.