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Zhongpin Reports Record Results for Q3 2009

by 5m Editor
11 November 2009, at 9:07am

CHINA - Zhongpin Inc., a leading meat and food processing company in China, has reported higher revenues, net income, and diluted earnings per share for the third quarter of 2009.

Zhongpin also reduced its guidance for the full year 2009 because, even though Zhongpin's sales volume in the third quarter 2009 achieved a record high, pork prices in China are currently not increasing.

According to the company, revenues increased 26.7 per cent in the third quarter 2009 compared to $194.9million from $153.8 million in the third quarter 2008. The company's net income also rose by 30.7 per cent, that is, from $10.1 million to $13.2 million in 2009. Diluted earnings per share increased 29.4 percent to $0.44 from $0.34.

The trend for hog and pork prices during the third quarter 2009 turned upward in July and early August, then stabilized at those somewhat higher levels through September. Prior guidance for the year 2009 has been reduced to account for stable, but not increasing, pork prices and for the higher average number of common shares outstanding because Zhongpin issued 4,600,000 additional common shares on 15 October 2009.

The company announced that it has started to construct three cold storage processing firms and distribution centers adjacent to three of its food processing plants in Henan province. Each center will add approximately 20,000 square meters of space; processing is expected to begin in the second quarter of 2010. Initially, about 40 per cent of the capacity will handle Zhongpin's pork and agriculture products, with the remaining 60 per cent used to provide storage, processing, and allocation services for other food producers. Total cost for all three centers will be approximately $13.6 million.

Construction of two new pork processing plants in Tianjin, which began in April 2009, continued during the quarter. The production lines for chilled and frozen pork products and prepared meat products, with a total of 136,000 metric tons of capacity, are expected to come in line in the first and third quarters of 2010, respectively.

Construction of a new pork processing plant in Changge, with 36,000 metric tons of capacity, is in progress and is expected to come on line in the fourth quarter 2009.

Construction of one premium food oil plant in Changge, with 20,000 tons of capacity, is going on. It is expected to take shape in the second quarter 2010.