August 31, 2010

Bright Dairy posts 34.7% rise in H1 net profit

Bright Dairy and Food reported first-half revenue rose 12.35% on-year to RMB4.33 billion (US$636 million), while net profit attributable to shareholders grew 34.7% to RMB61 million (US$8.96 million).

Agricultural product prices rose in the first half, while logistics costs increased as a result of dreary weather affecting parts of China.

Gross margin of dairy products dropped 2.59% on-year in the first half. The decrease triggered a 51% stake purchase in a New Zealand company, Synlait Milk, as Bright Dairy and Food aims to stabilise milk supplies and increase high-end milk output.

The acquisition was approved by shareholders at the beginning of August and was worth a total of RMB382 million (US$56 million).

For the year, the company targets RMB9.48 billion (US$1.39 billion) in revenue and RMB190 million (US$27.91 million) in net profit after deducting non-recurring gains, losses and stock incentive costs in 2010.