China Resources earnings surge

Red chip China Resources Enterprises' underlying profit the first nine months of this year surged 17.6 per cent year on year, above the consensus forecast, to HK$1.75 billion on bigger appetite for pork, beer, groceries and stockings in the mainland.

Including non-recurring gains from revaluation of investment properties and asset sales, net profit jumped 21.43 per cent to HK$765 million in the third quarter ended September 30 and 137.6 per cent to HK$4.5 billion in the first nine months, the diversified retailer announced yesterday.

The stellar performance, which topped the net profit beating the full-year forecast of HK$3.9 billion by a Thomson First Call poll of 18 analysts, sent shares up 2.37 per cent to HK$28.05 yesterday.

'The robust performance of our core businesses compensated for the profit shortfall following the divestment of the petroleum business,' said managing director Mark Chen Shulin.

He said the group, which operates supermarket chains and distributes apparel, livestock and frozen food, had benefited from the mainland's economic growth, which powered ahead at 11.5 per cent in the first nine months.

The sale of the petroleum distribution operation in Hong Kong was completed in June and yielded a HK$2.39 billion exceptional gain.

As a result of the sale, turnover fell 20.87 per cent to HK$14.23 billion in the third quarter and 0.37 per cent to HK$49.38 billion in the first nine months. The engine of growth was the retail sector, where profit soared 340 per cent to HK$127 million in the third quarter, boosting the nine-month total 127 per cent to HK$400 million.