China-based Citic Group has posted a big slide in full-year profit to $HK39.8 billion ($6.5 billion) for 2014, on the back of a $2.2 billion impairment charge on its Sino Iron project in the Pilbara.
In a statement today, the company said that, excluding the impairment charge, profit was 10 per cent higher than the previous year, which was mainly due to the solid performance of the businesses in the financial services sector.
Citic is believed to have invested about $10 billion in the Sino Iron project.
“Businesses in the non-financial sector did less well, affected by the sharp decline in commodity prices and a subdued property market,” the company said in a statement.
“Despite these conditions, businesses including special steel and aluminium wheels and castings recorded strong growth amid intense market competition.”
Citic chairman Chang Zhenming said the company’s multi-sector business model would not change, but Citic aims to have greater balance between the financial and non-financial businesses in the long-term.
“To achieve this, improving the profitability of our existing non-financial businesses and investing in areas with higher returns and significant growth prospects are priorities,” Mr Zhenming said.
The board recommended a final dividend of 3 cents per share, giving shareholders a full-year dividend of 4 cents per share.
