Yurun Sees Profits Rise
CHINA - China Yurun Food Group Limited, a leading vertically-integrated meat-product processor and supplier in China recorded a turnover of HK$5,834 million in the first six months of the year compared to HK$6,043 million in teh same period last year.
This was a 3.5 per cent decrease over the same period last year.
The company said that in the face of significant price decrease of live pigs, the Group was able to increase its sales volume by 35.1 per cent through its well-established sales network which has, to a large extent, offset the adverse impact of market price fluctuations.
During the period, the Group's gross profit and net profit were HK$976 million, compared to HK$821 million last year, and HK$841 million, compared to HK$615 million, respectively, represent an increase of 18.9 per cent and 36.9 per cent respectively.
The Group's gross profit margin and net profit margin increased significantly to 16.7 per cent (1H2008: 13.6 per cent) and 14.4 per cent (1H2008: 10.2 per cent) respectively.
The increase in gross margin was largely achieved due to a strong underlying foundation built by the Group. In the past few years, based on its foresight and deep understanding of the pricing trends and cycles of live hogs, the Group has prudently expanded its capacity and implemented strategic policies.
As a result, it is now reaping the benefits of economies of scale, enhanced capacity utilization, and significant reduction in unit cost.
Sales of relatively higher margin LTMP (Low Temperature Meat Product) and chilled meat products during the Period were proportionally higher, aiding to lift the overall gross margin.
Mr. Zhu Yicai, Chairman of Yurun Food, said: "Despite the challenging economic environment, we are pleased to announce our satisfactory 2009 interim results.
"Leveraging on its stringent quality control systems, strong brand recognition and successful strategic planning, the Group's core business was not affected by the H1N1 influenza during the Period; hog slaughtering volume increased by 35.6 per cent as compared to the same period last year.
"Furthermore, the fluctuation of hog price in the first half of the year affected the Group's total turnover, but profit maintained satisfactory growth as a result of economies of scale, prudent live hog procurement and flexible inventory management.
"Looking forward, in view of the supportive policies implemented by the central government to consolidate the industry, Yurun Food, as a leading enterprise in the meat products industry will continue to increase market share, and thereby strengthen market leadership through prudent capacity expansion. Given the economic recovery and rebounding hog price, the Group is confident that its business will maintain steady growth in order to maximise shareholders' returns."
