CHINA: Tingyi H1 profits leap on lower costs
- H1 net profits for beverages up 125% to US$197m
- Net beverage sales increase 2.5% to $3.3bn
- Operating profits (EBIT) for beverages grow 84% to $274m
- Group sales up 1.5%
Tingyi warned of a slow down in China
Tingyi has boosted profits in its beverage unit as raw material costs fell, but the China-based group also warned of a slowdown in its domestic market.
Net profits for beverages were up 125% to US$197m in the six months to the end of June, Tingyi said yesterday. Net beverage sales climbed 2.5% to $3.3bn in the same period while operating profits (EBIT) for beverages increased 84% to $274m.
Sales growth was below the overall China beverage market, which increased by 3.4%. The group said there was a “downturn” in the domestic economy in Q2, caused by weak consumer spending and unfavourable weather but that its margins improved because of lower costs on sugar and PET resin.
Looking ahead to Q3, Tingyi said it aims to capture beverage sales during the peak buying season.
The company, which also sells instant noodles and snacks, said overall group profits were up 38% to $337m, while sales climbed by 1.5% to $5.5bn.
Tingyi's share price in Hong Kong fell this morning but rallied in the afternoon to end level.
To read the company's full results, click here.
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