(Yicai) Aug. 27 -- Chinese white goods giant Gree Electric Appliances reported lower first-half earnings due to a combination of factors, including a drop in overseas sales and higher material costs.

Net profit slid 7.9 percent to CNY13.3 billion (USD2 billion) in the six months ended June 30 from a year earlier, the Zhuhai-based company said in its semiannual financial statement yesterday. Revenue dropped 8.2 percent to CNY89.4 billion (USD13.3 billion).

Income from the Chinese market rose 1.9 percent to CNY72.5 billion, while overseas revenue plunged 22 percent, despite sales in Western and Northern European countries such as Denmark, Finland, the Netherlands, and Norway surging 92 percent.

Gree attributed the setback in its overseas business largely to geopolitical conflicts, which caused a sharp drop in revenue from the Middle East. The first half also saw copper prices skyrocket and a broad increase in chip and electronic component prices.

The entire Chinese air conditioning industry came under strain in the first half. Retail sales of home air conditioners tumbled 13 percent to 40.96 million units from a year ago and slumped 16 percent by value to CNY122.1 billion (USD18.2 billion), according to data from market research firm AVC.

Lower-priced AC products continued to dominate online channels, with those costing less than CNY2,100 (USD312) accounting for just over 54 percent of online sales during the period, AVC’s data also showed.

China’s exports of home ACs slipped 10 percent to USD9.6 billion in the first half, according to data from ChinaIOL.Com, a research and data monitoring platform. Domestic sales of commercial-use ACs dipped 1.7 percent to CNY68.4 billion.

Gree said it will not pay an interim cash dividend. Its shares [SHE: 000651] ended 1.1 percent lower at CNY39.27 (USD5.84) apiece in Shenzhen.

Editor: Futura Costaglione