CAYMAN ISLANDS: Tingyi Q1 profits fall as beverage unit absorbs PepsiCo deal
- Beverage unit's Q1 net profits drop to US$21.5m from $208m
- Net sales sales jump by 79% to $817.5m
- Total group profits fall by 47%
Tingyi confirmed the PepsiCo deal last March
Tingyi Holding Corp's beverage division has posted a sharp fall in first quarter profits and sales due to costs from its link-up with PepsiCo.
Net profits fell to US$21.5m from $208m in the three months to the end of March, the Cayman Islands-based company said today (20 May). Net sales increased by 79% to $817.5m over the same period. The company said that, without the costs incurred when Tingyi joined with PepsiCo, net profits were up by 12.4%.
However, Tingyi said the jump in sales was down to the deal confirmed in March last year, which saw Tingyi's beverage subsidiary became PepsiCo's franchise bottler in China.
Tingyi's overall group profits fell by 47% because of the declines in its beverage unit, however sales increased by 37%.
The company said China's overall beverage sales volumes increased by 7.7% in the quarter, signifying an “upward recovery trend” for the sector.
For its PepsiCo business, it said a move to produce smaller bottle sizes had led to overall growth.
Tingyi's share price on the Hong Kong exchange fell by 2% today.
To read the company's official statement, click here.
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