Mengniu Dairy posts losses of US$139 million for 2008

Mengniu Dairy, the largest liquid milk producer in China, reported a net loss in 2008, the company's first since it was listed in Hong Kong in 2004.

Affected by the melamine-tainted milk scandal late last year, Mengniu said it incurred a full year net loss of US$138.8 million in 2008, compared with a profit of US$136.9 million in 2007.

The milk scandal, together with the write-off of certain products, and the additional costs incurred for raw milk disposal and promotional campaigns, contributed to a full year loss before interest, taxes, depreciation, and amortisation of US$67.6 million.

Mengniu's gross profit fell 2.8 percent to US$683.5 million amid rising raw milk price, as well as increased product promotion costs and the introduction of raw milk safety measures in the second half of 2008. The company's gross profit margin declined 2.9 percent to 19.6 percent.

Liquid milk segment remained as Mengniu's major revenue driver in 2008, which accounted for 88.3 percent of the company's revenue of US$3.08 billion.

Meanwhile, sales of the company's milk products have already recovered to 80 percent of the level before the milk scandal, according to Yang Wenjun, Mengniu's executive director and vice-president.