Prosperity Minerals Holdings Limited (AIM: PMHL.L), the cement manufacturing and iron ore trading business operating in China, fell after the company reported softening demand in China for its products.
The company said its iron ore trading business and Yingde Dragon Mountain operations contributed slightly lower profits, but that its share of profits from other associated companies was substantially lower than last year. Looking ahead, the company said it expected demand for cement and iron ore to weaken as China's economy softens due to the impact of the credit crunch and slowing demand in western markets for its exports.
Chairman & CEO David Wong said:
"It is never an easy task to report bad news, but we are all currently living through truly extraordinary economic times. Once the global economy has returned to normal, I am confident about the medium and long term prospects in the PRC both for cement manufacture and iron ore trading. Our cement assets are highly efficient and, even in the current market, continue to operate at or near full capacity. Similarly, Prosperity has an excellent iron ore trading model in which we do not take inventory risk positions. I look forward to being the bearer of better news."