China Resources Enterprise

CRE on acquisition trail after 34.4pc profit leap

PUBLISHED : Friday, 20 May, 2011, 12:00am
UPDATED : Friday, 20 May, 2011, 12:00am

Consumer giant China Resources Enterprise said yesterday it will pursue growth through acquisitions after reporting a 34.4 per cent jump in underlying profit to HK$660 million in the first three months of this year.

Including a post-tax profit from asset revaluations and disposals, the net profit rose 15.4 per cent to HK$826 million on turnover of HK$26.67 billion, 26.4 per cent higher than a year ago.

Chairman Qiao Shibo said promising growth in the consumer market continued in the second quarter despite rising labour and raw materials costs and a nationwide policy to keep prices of daily necessities flat to curb consumer price inflation.

'We will actively pursue both acquisition opportunities and organic growth to strengthen our core businesses,' Qiao said.

Leading the growth was the retail division, which runs 3,300 stores, such as Vanguard and Ole supermarkets and CR Care pharmaceutical stores around the mainland and in Hong Kong.

Underlying profit at the retail division rose 33.7 per cent to HK$694 million while turnover grew 27.7 per cent to HK$19.02 billion as a result of strong consumption during the Lunar New Year holidays in February.

China Resources said it had taken some measures, such as sourcing food and produce directly from farmers, to offset higher operating costs and wages.

The food distribution division, Ng Fung Hong, saw profits climb 1.7 per cent to HK$118 million and turnover grow 24.1 per cent to HK$2.26 billion.

The beer division recorded a 5.3 per cent rise in profit to HK$20 million and 20.1 per cent growth in turnover to HK$4.9 billion.

China Resources shares gained 18 HK cents to HK$30.45 yesterday.