Subsidies didn’t stop Doublestar losing money in Q3
The sales of PCR showed a good trend, but it still failed to reverse the loss situation of Doublestar (Photo: Doublestar)
In the third quarter of 2023, Doublestar’s revenue increased by 11.95 per cent year-on-year to 1.23 billion yuan (approximately £139 million; €159 million). Doublestar specified that its PCR products had achieved profitability from July to September. However, overall, during the reporting period, the tyre manufacturer was still in the red despite an increase in operating income, with a loss of 53.32 million yuan (approximately £6 million; €6.87 million).
It is worth noting that Doublestar’s losses occurred despite receiving massive subsidies from the government. After excluding non-recurring gains and losses, Doublestar’s loss from July to September was 111 million yuan (about £12.5 million; €14.3 million). Tyrepress China noted that in the non-recurring profit and loss column, Doublestar received a government subsidy of 62 million yuan (approximately £7 million; €8 million) in the third quarter.
In the first three quarters, Doublestar’s revenue was 3.47 billion yuan (about £390 million; €450 million) and a loss of 185 million yuan (about £20.8 million; €23.8 million). After deducting non-recurring gains and losses, its loss was 268 million yuan (approximately £30.1 million; €34.5 million).
Doublestar did not explain why its operations are still operating at a loss. In its third-quarter report, the tyre manufacturer stated that its overall performance had improved significantly compared with the previous year and cited a series of good news.
Doublestar’s Cambodia factory has completed the registration procedures and laid the foundation stone in May 2023. At present, the construction of this tyre factory has eliminated the impact of the rainy season, and all work is progressing in an orderly manner as planned.
In the third quarter, Doublestar’s overseas revenue increased by 27 per cent year-on-year, of which PCR products increased by 39 per cent. Revenue from replacement in the Chinese market grew by 10 per cent year-on-year, of which PCR products increased by 43 per cent.
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