Retail units buoy profit at China Resources
Robust growth at China Resources Enterprise's supermarkets led to a 2 per cent jump in net profits to $674.03 million in the first three months of this year.
Profit would have risen 17 per cent after taking out a one-off gain of $84 million from the disposal of a 10.5 per cent stake in a joint venture in the same period a year ago.
Units recorded growth in turnover and profit. The loss-making beverage operation cut its losses.
But it was the retail unit that provided the engine of quarterly growth this year, with the group's 2,100-strong supermarkets generating 84 per cent growth in profit share to $101 million due to the combined effect of strong same-store growth, lower operating costs and contributions from new stores.
Earnings before interest, tax, depreciation and amortisation at the retail unit were 29 per cent higher at $270 million.
'The results represent a good start for the full year, underscored by robust growth in the core businesses,' managing director Mark Chen Shulin said yesterday.
The beverage unit was the only laggard, falling victim to traditionally low demand for beer in winter. Net loss narrowed to $28.97 million from $35.67 million due to stable operating expenses and improved gross margin.
The beverage unit was the best performer by revenue growth, with a 37.2 per cent rise to $1.51 billion, driven mainly by the flagship Snow beer brand. '[This is] a solid platform for peak beer sale seasons in the second and third quarters,' Mr Chen said.
After a string of asset disposals at the petroleum division, its profit contribution fell 61.98 per cent to $79.91 million on 36.14 per cent revenue growth to $5.95 billion.
The textile unit continued to improve after bouncing back into the black last year, with its first-quarter profit contribution climbing 7.98 per cent to $17.72 million.
Group revenue was up 26.5 per cent to $15.43 billion. Earnings per share fell 3.3 per cent to 29 cents.
China Resources' financial health improved as net debts were reduced 25.93 per cent to $2.43 billion, bringing down its debt-to-equity ratio 4.4 percentage points to 9.9 per cent.