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Mengniu H1 net profit up 28%

Updated: 2011-08-30 15:09

(Agencies)

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China Mengniu Dairy Co Ltd, the country's top dairy product maker, on Tuesday posted a 27.6 percent rise in first half profit on solid sales growth and pledged to ensure product quality, after a series of scandals tainted the industry's reputation, Reuters reported.

Ongoing market expansion and stricter government safety controls had "created a healthy environment to nurture the future development of the dairy industry in China," chief executive officer Yang Wenjun said in a statement.

Mengniu will continue to develop ranching areas as well as small to mid-size ranches to boost the proportion of raw milk from ranches and "ensure product quality," Yang said.

Contamination incidents last year hurt the dairy industry and major players including China Mengniu Dairy, Bright Dairy & Food Co Ltd and Inner Mongolia Yili Industrial Group Co Ltd.

The authorities seized more than 100 tons of melamine-tainted milk powder, the latest case after contaminated milk powder was blamed for causing the deaths of at least six children in 2008 and poisoning about 300,000.

China Mengniu said net profit for the first half of 2011 amounted to 789.75 million yuan ($123.7 million), up from 618.82 million yuan a year ago. That matched an average forecast of 775.5 million yuan by three analysts polled by Reuters.

Turnover for the period rose 28.7 percent to 18.58 billion yuan from 14.43 billion yuan a year ago.

Revenue from the liquid milk segment increased 30.8 percent in the first half of 2011 to 16.29 billion yuan, accounting for 87.7 percent of total revenue, the company said.

Gross profit margin for the period was maintained at 26 percent, unchanged from a year ago, despite higher raw milk and other raw material prices, it said.

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