Textile unit weakens CRE
Profit gains at China Resources Enterprise (CRE) have remained marginal this year, constrained by weakness at the conglomerate's textile unit and last year's high comparison base.
The textile unit has been hit by plummeting cotton prices, relocation of two textile factories, higher depreciation charges and severance payments related to efficiency upgrades in its production system.
The unit posted a net loss of $11.98 million for the first nine months of the year, against a profit of $127.89 million for the same period last year. It lost $57.8 million in the third quarter alone.
Group-wide profits edged up 1.5 per cent to $1.13 billion in the nine-month period, with its core retailing operations delivering the strongest performance.
Retail operations earned a net $82.1 million during the period, against a loss of $111.5 million last year, when the mainland and Hong Kong were gripped by Sars.
'Strong profit recovery was driven by effective pricing strategy, optimised composition of merchandises, growing contribution from [supermarket chain] Suguo as well as a substantial increase in suppliers' rebates,' China Resources said yesterday.
Its beverage unit, which brews Snow beer, saw net profit jump 42.78 per cent to $135.47 million.
Turnover at China Resources was 39.9 per cent higher at $35.02 billion. Earnings per share remained unchanged at 54 cents.