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Exchange losses hit Q1 bottom line for China Minzhong
CHINA Minzhong Food Corp turned in a net profit of 15.5 million yuan (S$1.2 million) for the three months ended Sept 30, down about 73 per cent, dragged down by higher exchange losses.
Revenue dipped 4 per cent year on year to 467.7 million yuan, due partly to its beverage business as the slowing economy and lower spend on advertising and promotion hit revenue from that business segment.
Gross profit for the first quarter of FY16 declined 7.6 per cent to 118.1 million yuan in line with lower revenue. Meanwhile, overall gross profit margins fell one percentage point to 25.3 per cent.
Commenting on its outlook, the group said: "On the back of rising urbanisation and declining rural labour, the cultivation and processes business segments will continue to face challenges ahead in view of the shortage of rural labour for cultivation activities and rising costs."
It added: "However, the agriculture industry in China continues to be strongly supported by the government, particularly in the use of modern agriculture technology to increase food security."