ZK International Group Co., Ltd. (ZKIN), a leading designer, engineer, manufacturer, and supplier of high-performance stainless steel and carbon steel pipe products, has announced its audited financial results for the fiscal year ended September 30, 2023.
The company reported record revenue of $111.60 million, an increase of 8.99% compared to the previous year. This growth was primarily driven by a strategic decision to lower selling prices to increase sales volume, despite challenges in the Chinese real estate market. The company observed a recovery in the real estate market and an increase in market demand in the 2024 fiscal year, prompting them to raise prices.
Despite the record revenue, ZK International reported a net loss of $61.06 million for the fiscal year. This loss was primarily attributed to one-time write-offs related to various non-core investments, including the company’s long-term investment in CG Malta and software platforms like xSigma Trading, MaximNFT, and the Defi Exchange. These write-offs were part of a strategic move to streamline operations and focus on high-growth opportunities.
The company’s gross profit decreased significantly, dropping to $1.30 million from $7.60 million in the previous year, primarily due to the decreased weighted average selling prices. ZK International anticipates an improvement in gross margin in the 2024 fiscal year due to the increase in selling prices.
Loss from operations also increased significantly, reaching $60.44 million, primarily due to the one-time asset impairment cost related to the write-offs of non-core investments and stock-based compensation.
Despite the challenges and write-offs, ZK International remains optimistic about the future. The company is confident in its ability to navigate the evolving market landscape and deliver sustainable value to its shareholders. The strategic decisions made to write off certain investments will allow the company to focus on its core business and drive long-term growth.
ZK International Group Co., Ltd. is a leading provider of high-performance stainless steel and carbon steel pipe products, with a focus on supplying steel piping for the multi-billion dollar gas and water sectors. The company has supplied pipelines for over 2,000 projects, including the Beijing National Airport and the venues for the 2008 Beijing Olympics. ZK International is committed to providing high-quality, sustainable, and environmentally sound drinkable water solutions to both the Chinese market and international markets.
