CHINA: Bottled water sales boost Tingyi in YTD
- Beverage unit nine-month net profits rise by 75% to US$371.8m
- Net sales up by 21.8% to US$4.3bn
- YTD profit before tax increases by 66% to US$458m
- YTD group net profits rise by 34% to $211.44m
Tingyi is seeing the benefits from its tie-up with PepsiCo
Tingyi Holding Corp's beverage division has reported a healthy jump in nine-month net profits, boosted by strong bottled water sales and its tie-up with PepsiCo.
Net profits for the unit in the nine-months to the end of September rose by 75% to US$371.8m, the company said today (19 November). Sales in the same period were up by 21.8% to $4.33bn. Profits before tax increased by 66% to $458m.
Third-quarter sales jumped by 57% to $1.82bn.
The group said that a fall in raw material costs meant that the gross margin on drinks has risen to 31%.
It said that, in light of the rapidly rising popularity of sugar-free beverages, it has introduced a new sugar-free series Teahouse – which includes mellow green tea, jasmine tea, oolong tea and Tie Guan Yin.
On bottled water, it said the quarter was the division's “most outstanding” sales performance to date for its mineral and natural mineral water products.
The group said its tie-up with Pepsi, confirmed earlier this year, had improved earnings “significantly” as economies of scale and synergies have been developed in its carbonated beverage business. The companies opened their first joint production site last month.
Tingyi said: “We will introduce more products which cater for the taste of customers with a reasonable price, in order to satisfy different needs of customers.”
Looking ahead, the company said it is “confident” over “long-term development” prospects for the beverage industry. It will “continue to increase investments in equipment and capacity to meet the requirements of future growth”, the group added.
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