Cofco Meat reports 142m yuan profit, predict tight supply of hogsBusiness | 27 Aug 2019 1:34 pm
Cofco Meat (1610) said first-half net profit, after biological assets fair value adjustments, amounted 142.26 million yuan (HK$155.83 million), compared with a net loss of 243.16 million yuan.
Before biological assets fair value adjustments, the net loss was 276 million yuan, representing a year-on-year drop of 287 million yuan as compared with the profit of 11 million yuan for the same period in 2018.
The subsidiary of Chinese state-owned grains-to-property conglomerate Cofco, reported a 34.9 percent increase in revenue to 4.4 billion yuan, mainly due to the rapid growth in sales volume of the meat import business and year-on-year increase in hog production volume.
The basic earnings per share were 3.65 fen.
The hog production volume grew by 15.2 percent to 1.45 million head.
Fresh pork sales volume fell by 6 percent to 86,000 tons due to the increase of pork reserves.
Gross profit margin before biological assets fair value adjustments fell from 4.6 percent to 3 percent.
The loss was mainly due to factors such as low hog prices and the company’s expanding investment in biosecurity.
Following the African swine fever epidemic hog and sow stocks declined rapidly.
In July, the volume of hog and sow stocks dropped to its lowest point in the recent decade, down by 32.2 percent and 31.9 percent year-on-year, respectively. It is expected that the tight supply of hogs will persist in the second half and next year, which will support higher hog prices, the company said.