Dairy firm China Mengniu says H1 profit rises nearly 40 pct

China Modern Dairy Holdings

30/08/2018 01:59

HONG KONG, Aug 30 (Reuters) - China Mengniu Dairy Co Ltd
 2319.HK  late on Wednesday said its first-half net profit
jumped 38.6 percent, boosted by reduced costs and stronger sales
due to higher-quality products.
    China's top milk products manufacturer said in a statement
that net profit for January to June came in at 1.56 billion yuan
($229 million), compared with a profit of 1.13 billion yuan at
the same time last year. Revenue rose 17 percent to 34.47
billion yuan.
    "As the industry goes deeper into supply-side structural
reform, its focus has also changed from seeking to grow in scale
to achieving steady growth in per capita consumption and quality
upgrades," said Chief Executive Officer Jeffrey Lu.
    Gross profit margin increased 3.6 percentage points from a
year ago to 39.2 percent amid relatively low prices for raw milk
and an improving product mix.
    "Mengniu will continue to explore overseas upstream
resources and refine its global milk source supply chain," Lu
said in the statement.
    Mengniu is stepping up development and sales of premium
products and is working with major shareholders and partners
like Danone Group  DANO.PA  and Arla Foods to bring more dairy
goods to China. It said on Wednesday that it would work with
China Modern Dairy  1117.HK  to explore expansion in fresh milk
and yogurt markets.
    Mengniu said it would team up with Alibaba  BABA.N  to
increase the global reach of Chinese dairy products. It also
plans to develop business in Malaysia and the Philippines in the
second-half of 2018.
    Shares of Mengniu have gained 1.1 percent so far this year,
outpacing a 5-percent fall in the benchmark Hang Seng Index
 .HSI .

($1 = 6.8190 Chinese yuan renminbi)

 (Reporting by Donny Kwok; Editing by xxx)
 ((donny.kwok@thomsonreuters.com; +852 2843 6470; Reuters
Messaging: donny.kwok.reuters.com@reuters.net))