CHINA: Rising costs hit Tingyi Holdings Corp nine-month profits
- Nine-month net profits drop by 9.7% to US$359.6m
- Sales amount to $6.3bn, a 19% increase on the prior-year
- Third-quarter net profits slide by 34.8% to $130.6m
- Beverage profits in the quarter slide by 57.3% to $25.3m
Tingyi's net profits dropped by 9.7% in the nine-month period
Tingyi (Cayman Islands) Holdings Corp has recorded a drop in profits in the first nine months of 2011 as a result of higher raw material costs and poor weather hitting its beverages division.
For the period to the end of September, net profits dropped by 9.7% to US$359.6m, the Chinese instant noodle and soft drinks producer reported last week. Sales in the period, however, amounted to $6.3bn, a 19% increase on the prior-year period.
The firm said that unexpected weather conditions and the price increase of raw materials affected profits. In the third quarter, net profits slid by 34.8% to $130.6m, while operating profits dropped by 21.3% to $299.4m. Sales, however, edged up by 6.7% to $2.20bn.
The quarter - the peak season for beverage sales - was affected by a number of food safety incidents, including those involving fruit juice additives, lower temperatures in the southern regions and "a general weak performance" in the overall drinks industry, the group said.
As a result, beverage sales dropped by 8% to $1.16bn for the quarter, while profits in the beverages division slid by 57.3% to $25.3m.
Click here to view the full earnings release.
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