Fewer one-off gains drag down China Foods net
China Foods, the edible oil and beverage unit of the mainland's largest food importer and exporter, said net profit fell 38.9 per cent last year as it generated fewer one-off gains.
Net income for the year to December dropped to HK$483.43 million from HK$791.69 million a year earlier.
But underlying profit increased 34 per cent to HK$483 million from HK$361 million.
China Foods' parent, China National Cereals, Oils & Foodstuffs Import & Export Corp (Cofco), is the largest state-owned food trading company.
In 2007, the company had one-off gains of HK$533 million from the disposal of a stake in Coca-Cola Bottlers and income from China Agri-Industries Holdings until the unit's spin-off was completed in March.
Sales, which came from wine, beverages, edible oil and confectionery, increased 46 per cent to HK$14.24 billion.
'The company targets to realise synergies in the sales channels of our different business units. In 2009, we will form a marketing and sales department at the company level to implement this strategy,' China Foods said in a filing with Hong Kong stock exchange yesterday.
Although accounting for only 2.56 per cent of total turnover, its confectionery business had an operating loss of HK$121.2 million, the only business unit that incurred a loss during the year.
Chocolate sales under the Le Conte brand dropped 16.5 per cent to HK$365 million, following the tainted-food scandal on the mainland.
'The year was most difficult for the confectionery business due to external factors beyond our control, but we believe the worst is now behind us,' China Foods said.
The company expects sales growth this year as it has deployed a new management team for the unit.
Its biggest profit contributor, the wines unit, saw turnover grow 30.4 per cent to HK$2.79 billion.
The edible oil business achieved a turnaround during the year as raw material costs fell in line with a drop in international soya bean prices.
Shares of China Foods closed down 0.32 per cent at HK$3.09 yesterday. A final dividend of 3.84 HK cents was declared.
Net profit for last year dropped 38.9 per cent to HK$483.43 million
The company reported revenue of HK$14.24 billion, an increase of: 46%