Yurun Food Sees Sales and Profits Soar

CHINA - China Yurun Food Group Limited, a vertically-integrated meat-product processor and supplier in China, recorded a turnover of HK$8,693 million for the first half of 2010 compared to HK$5,834 million in the first half of 2009.
calendar icon 26 August 2010
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The sales increase represents a 49 per cent increase over the same period last year.

The increase in turnover was mainly attributable to the Group's anticipated production capacity expansion plans and brand building over the past years, as well as the prosperity of the Chinese consumer market during the Period, which further accelerated demand for branded quality meat products. As a result, the Group's overall business recorded robust growth.

The Group's gross profit and net profit reached HK$1,345 million compared to HK$976 million in 2009 and HK$1,309 million compared to HK$841 million in 2009 respectively.

These were increases of 37.8 per cent and 55.7 per cnet respectively.

The Group's gross profit margin decreased 1.2 percentage points to 15.5 per cent, as compared to 16.7 per cent in the same period last year, and net profit margin increased 0.7 percentage point to 15.1 per cent as compared to 14.4 per cnet in the same period last year.

The slight decrease in gross margin was mainly attributable to the increase in the proportion of sales from the upstream segment, which has a relatively lower profit margin.

The board of directors of the Company has resolved to declare an interim dividend of HK$0.20 per share for the Period (1H2009: HK$0.15).

Mr. Zhu Yicai, Chairman of Yurun Food, said: "In the first half of 2010, domestic consumption in China continued to be promising, which provided great momentum to the development of the Chinese meat product market. In addition, with our nationwide capacity expansion and market strategy in recent years, the Group maintained a sustainable business growth.

"Moreover, to ensure the systematic development of the hog slaughtering industry in China, the Central Government has gradually implemented a series of favourable policies, with a purpose of consolidating the industry by eliminating outdated hog slaughtering capacity which are below safety and hygiene standards in the coming five years, leading to a systematic increase in sales proportion of chilled and small packaged pork products in the market.

"Given the rising awareness of the Central Government and consumers to food safety, the regulatory and operational environment is favourable to the sustainable development of Yurun Food. Opportunities arising from industry consolidation continued to further promote the Group's sales and profitability of upstream branded chilled pork and downstream low temperature meat products ("LTMP").

"Looking forward, the Group will continue to realise its strategic production capacity expansion plans, actively expand its distribution channels, and capture the tremendous business opportunities brought about by industry consolidation in order to continuously enhance the Group's market share and shareholders' returns."

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