SINGAPORE (Mar 29): China Kangda Food Company posted a FY17 loss of RMB15.8 million ($3.3 million) compared to earnings of RMB6.3 million a year ago.
In a Wednesday filing, the group attributes the full-year loss largely to higher mortality rates of chicken resulting from bad weather, as well as higher administrative costs.
The loss comes even as revenue remained steady at around RMB1.3 billion when compared to a year ago, with a 5.8% increase in sales turnover and higher gross profit margin to 8.3% from 8% previously.
Over the year, sales of chilled and frozen rabbit products grew by 12.4% to RMB157.1 million on the recovery of demand, which China Kangda says it responded to by enhancing the rate of production utilisation by expanding sales channels and continuous marketing efforts.
While revenue derived from the production and sales of chilled and frozen chicken meat products increased by 15.8% to RMB268.9 million, revenue for the production and sales of processed food products fell by 5.5% to RMB690.9 million on lower demand.
In particular, the group says bad weather has brought a negative impact to tis breeding production process of chicken on top of a “fierce business environment”, which has put additional pressure on the profit growth of its chicken meat segment.
Administrative expenses for FY17 grew to RMB58.5 million from RMB 49.1 million a year ago from higher professional fees and the staff costs of senior management upon converting the company’s listing status on the SGX-ST and a change in shareholding structure.
In its outlook, the group says it expects to face greater challenges ahead within the food industry in the face of low growth and intense competition.
As such, the group says it will continue to increase sales contribution from high value-added chicken related processed foods and nurturing major customers, while continuing to reduce its costs by identifying and restructuring its operations.
Shares in China Kangda closed flat at 17 cents on Wednesday.
