[ET Net News Agency, 20 January 2021] Dalipal Holdings Limited (01921) said the group
expects to record a net loss in the range of RMB120 million to RMB140 million for the year
ended 31 December 2020 (FY2020) as compared to the group's net profit of approximately
RMB337.4 million for the year ended 31 December 2019.
Such net loss was mainly attributable to (a) the outbreak of the COVID-19 pandemic,
which led to the temporary suspension of the group's production facilities during the
first quarter of 2020 and the subsequent disruption to the group's operation from time to
time; (b) the decrease in demand and prices for the group's oil country tubular goods
(OCTG) products as oil companies' operations were disrupted by the pandemic, which had
caused oil companies to become more conservative in their exploration and development; and
(c) the decrease in gross profit margin of the group's OCTG products as a result of (i)
the increase in cost of raw materials, such as scrap metals as a result of the pandemic;
and (ii) the decrease in production efficiency as a result of the reduction in production
volume of the group's OTCG products and the fixed costs which had to be incurred during
the production suspension period. (RC)