CAYMAN ISLANDS: Tingyi Holding sees drinks profits, sales slow in Q1
- Q1 beverage unit net profits tumble by 80.5% to US$17.4m
- Beverage unit sales in three months to end of March fall by 21.6% to $817.6m
- Group net profits leap by 81% to US$302.5m
- Group sales slip by 5.2% to $1.93bn
Tingyi Holdings released its Q1 results earlier today
Tingyi Holding Corp has reported a significant drop in Q1 profits in its drinks business due to the unstable economic environment and slowdown in growth of the Chinese economy.
The food and drinks firm, the biggest Taiwanese business operating in China, announced yesterday (28 May) that net profits in its beverage unit tumbled by 80.5% to US$17.4m, in the three months to the end of March. Sales dropped 21.6% to US$817.6m.
In explaining the poor performance, the company said in a statement that, as well as the state of the Chinese economy “preparations for marketing before the coming peak season resulted in a year on-year increase in selling expenses”. It also pointed to a rise in “depreciation charges”.
However, the group as a whole posted impressive net profits over the period – up 81% to US$302.5m. Group sales slipped though by 5.2% to $1.93bn.
Looking ahead, the company remains more optimistic for its beverage business. "Due to the seasonal nature of the beverages segment, higher revenue is usually expected in the second and third quarters,” it said.
“Higher sales during the period from June to August are mainly attributed to the increased demand for packed beverages during the hot season."
In March, regulators gave the green light to a deal between Tingyi and PepsiCo that will see the Chinese firm buy PepsiCo’s entire soft drinks bottling business in China in exchange for a 5% interest in its business unit.
To read the company's official announcement, click here.
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