China Yurun reports rise in H1 profits

China Yurun Food Group Limited, a leading vertically-integrated meat-product processor and supplier in China, recorded a turnover of HK$5,834 million (US$752.8 million) in the first six months of the year compared to HK$6,043 million in the same period last year, which was an on-year decrease of 3.5 percent.

Despite the significalnt fall in live hog prices, Yurun was able to increase its sales volume by 35.1 percent through its well-established sales network which has, to a huge extent, offset the adverse impact of market price fluctuations.

During the first half of the year, Yurun's gross profit was HK$976 million, an increase of 18.9 percent from the HK$821 million achieved last year. Meanwhile, the company's net profit reached HK$841 million, a rise of 36.9 percent from the HK$615 million achieved last year.

Consequently, Yurun's gross profit margin and net profit margin rose significantly to 16.7 percent and 14.4 percent respectively.

The overall gross margin was lifted by the higher sales of the Low Temperature Meat Product (LTMP) and chilled meat products, both of which gave relatively higher margin.

Leveraging on its strict quality control systems and successful strategic planning, Yurun's core business was not affected by the AH1N1 flu outbreak during the first half of the year as hog slaughtering volume increased by 35.6 percent as compared to the same period last year, according to Zhu Yicai, chairman of Yurun.