Tingyi (Cayman Islands) Holding Corp (頂益控股), China's biggest packaged-food maker, said first-half profit plunged 79 percent in the absence of a one-time gain that boosted year-earlier earnings. Tingyi said costs may rise in the second half.
Net income fell to US$56.3 million, or US$0.01 a share, from US$266 million, or US$0.476, a year earlier, the company said in a Hong Kong exchange statement.
Sales rose to US$846.7 million from US$711.6 million. Tingyi said it would have posted a loss of US$6.9 million a year earlier without the one-time gain from selling a beverage company stake. It warned rising raw material costs and competition "will affect" second-half earnings.
"Because of the high price of Tingyi's core raw materials, the company gross margin will be squeezed," said Debbie Ho, an investor relations official, in an e-mailed statement.
Food and beverage companies such as Tingyi benefited from slowing gains in Chinese food prices earlier this year.
The company said its first-half net margin rose 3.9 percentage points to 31.56 percent.
Tingyi halved financing costs in the first half to US$5.3 million after it trimmed debt to US$607 million from US$1.5 billion. Distribution costs fell 3.3 percent to US$151.5 million.
Tingyi sells instant noodles and bottled green tea under the Master Kong brand.
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