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China Biodiesel International

  • BY: Andrew Hore |
  • POSTED: 10/02/2009 |

China Biodiesel International will benefit from Chinese government plans to refund value added tax to biodiesel producers using waste oil.

The biodiesel producer’s two facilities have recently qualified for the refund and they will continue to benefit from the lower taxes. This will help to improve margins.

Weaker demand from the petrochemicals industry meant that biodiesel sales volumes were lower in the second half of 2008. China Biodiesel sold 25,271 metric tonnes of biodiesel in 2008.

Price declines had an additional negative impact. The average selling price in the second half was 5.4% lower than in the first half.

Raw material costs also fell which led to a stock write-down. The lower costs will benefit the 2009 year.

China Biodiesel had already said that it would lose money in the second half of 2008. The first half profit improved from RMB7.92m to RMB9.93m.

Management believes that the world economy will continue to have a negative effect on the biodiesel industry, but it reckons that China Biodiesel will continue to improve its financial performance. This is thanks to a better product mix and the improved tax position.

At 5p a share, China Biodiesel is valued at £2.27m.

Full year figures will be reported on 20 April.

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