US/CHINA: SkyPeople Fruit Juice H1 profits up despite tough Q2
- H1 net profits up 4% to US$4.5m
- Net sales increase 4% to $29m
- Operating profits up 16% to $6.4m
- Fruit juice beverages increase Q2 gross profit by 49%
SkyPeople Fruit Juice has posted a solid rise in H1 sales and profits as expansion in fruit juice beverages helped offset second-quarter sales drops in concentrated drinks.
Net profits grew by 4% to US$4.5m in the six months to the end of June, the Chinese soft drinks maker said yesterday (13 August). Net sales increased by 4% to $29m over the same period while operating profits were up by 16% to $6.4m.
Q2 performance was worse, with net profits down 72% to $680,000 and net sales dropping 19% to $10.3m. Operating profits were down by 67% to $939,000.
SkyPeople CEO, Xue Hongke, said: “We recorded lower than expected financial results for the second quarter of 2013 attributable to reduced demand among our customers. However, we typically increase production of our concentrated fruit juice products in the third quarter which could potentially lead to improved sequential performance.”
In the second quarter, fruit juice beverage sales jumped by 35% to $8.6m and gross profit surged by 49% to $3.1m. At the same time, however, sales of concentrated kiwi fruit juice and kiwi puree fell by 98% to $10,000. Concentrated pear juice sales fell by 82%. Gross margins in concentrates were also hit by a decrease in unit selling price, SkyPeople said.
The company said it built an internal research and development team in the second quarter and also invested $72m in a manufacturing plant for kiwi fruit products.
“We continue to believe that China's economic growth and rising incomes are causing a transition in consumer tastes towards healthier lifestyles and improved nutrition. We see this as a long-term phenomenon that will stimulate further demand for our products,” Xue said.
To read the company's official statement, click here.
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