(Yicai Global) June 24 -- Bichamp Cutting Technology’s German unit has reported lower-than-expected results due to the economic fallout from the Covid-19 pandemic and the European Union’s high tariff on China’s iron and steel products, the leading Chinese bimetallic band saw blade maker said today.

The Remscheid-based firm, in which Bichamp owns a 28 percent stake, posted just EUR540,200 (USD610,617) in net profits for last year, well below its pledged target of EUR900,000 for the year, Bichamp said on June 24.

A punitive tariff levied by the EU on China’s iron and steel products is the main reason why the German unit fell short of its target, the Changsha-based firm said. The anti-dumping tariff has also frustrated the company's plans to form a synergistic relationship with the German firm through the supply of raw materials.

The added impact of the Covid-19 pandemic on the global economy and Arntz's daily operations, has led company partner Jan Arntz, a member of the 225-year-old German saw blade maker’s original founding family, to apply for a waiver of the EUR500,000 (USD565,280) penalty fee the firm owes for unmet performance targets.

When Bichamp invested EUR4.9 million (USD5.5 million) in November 2018, Jan Arntz committed the German unit to after-tax net profits of EUR900,000 in 2019, EUR1.2 million in 2020 and EUR1.5 million in 2021. Should these targets be missed, Arntz is liable to pay up to EUR500,000 in compensation and to undertake to raise additional funds for the investor.

Bichamp’s stock [SHE:002843] closed down 1.64 percent at CNY7.79 (USD1.10) today.

Editor: Kim Taylor