China XLX Announces 2024 1Q Results

Stepped-up promotion of differentiated products to ensure steady growth in gross profit margins of core products

2024 1Q Results Highlights:

• The income attributable to owners of the parent decreased by 15% YoY to approximately RMB 282 million.
• Gross profit margins of core products stabilized and grew on stepped-up promotion of high-efficiency fertilisers and differentiated products.
• The output and sales volume of methanol increased remarkably as the Group enhanced flexible adjustments between products.

HONG KONG, CHINA / ACCESSWIRE / April 26, 2024 / China XLX Fertiliser Ltd. ("China XLX" or the "Company", together with its subsidiaries collectively known as the "Group") (HKSE:1866.HK) announced that the Group recorded consolidated revenue of approximately RMB 5,750 million for the three months ended 31 March 2024 (the "Period"), representing a decrease of 8% YoY. The income attributable to owners of the parent decreased by 15% YoY to approximately RMB 282 million.

During the Period, the Group's overall gross profit declined due to lower product prices. In response, it strengthened product innovation and technological R&D, and increased the promotion of high-efficiency fertilisers and differentiated products to ensure the stabilisation and growth in gross profit margin. While the gross profit margin of the core urea product remained stable, the gross profit margins of compound fertilisers and chemical products showed an upward trend. In order to further enhance its market competitiveness, the Group has strengthened the construction of research platforms and R&D systems, laying a solid foundation for implementing the strategy to promote differentiated fertilisers. These efforts led to an increase in R&D investment as well as marketing and promotional expenses. Consequently, the Group's consolidated net profit decreased by 17% YoY to approximately RMB 383 million.

During the Period, the Group's urea revenue increased by 2% YoY to approximately RMB 1,994 million, . mainly due to a 26% YoY increase in urea sales volume. The successful commissioning of the 700,000-ton urea project at the Xinxiang Production Base led to a 19% YoY increase in production and boosted the sales volume to 965,000 tons. The urea sales gross margin for the Period was 30%, which stayed flat when compared to the same period last year. As for the urea solution for vehicles, , the Group proactively reduced the production of urea solution for vehicles to enhance its ability to withstand market risks. By reducing production and putting more effective production capacity on the exploration and development of new products to meet the market development needs, it enhanced profitability and strengthened its long-term competitiveness.