(Bloomberg) -- Contemporary Amperex Technology Co. Ltd., the world’s biggest maker of batteries for electric cars, has hit back at market rumors of a large futures loss that may have dented its second-quarter earnings.
“Our company’s hedging business is backed by spot trading,” Ningde, Fujian-based CATL, as the company is better known, said in a response to online questions from investors.
“Fluctuation in earnings or losses from futures trading is hedged correspondingly with spot cargo and hence that will have relatively small impact on the company’s results. The above-mentioned rumor is not true.”
Shares in CATL slumped as much as 5% Thursday morning. The Shenzhen-traded stock is down around 26% this year.
CATL in May posted its sharpest-ever drop in quarterly earnings for the first quarter, and disclosed a sizable derivatives liability.
Net income slid 24% to 1.49 billion yuan ($222 million) for the three months through March, while underlying profit dropped 41% to 977 million yuan. CATL’s 1.79 billion yuan derivatives liability was its first such charge since listing, and it didn’t explain the origins of it to investors.
The Chinese battery giant has been grappling with higher input costs and has used its dominance in the market to help pass on some of those rising costs to customers including Tesla Inc., Nio Inc. and Xpeng Inc.
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