SINGAPORE (May 15): Sino Grandness Food Industry Group saw its earnings fall 18.3% to RMB 43.1 million ($9.1 million) for the 1Q ended March, from RMB 52.8 million a year ago.
This was mainly due to higher distribution and selling expenses as well as lower gross profit margin during the quarter.
1Q18 revenue rose 14.6% to RMB 728.1 million, from RMB 635.1 million a year ago.
This was mainly due to higher orders from its beverage segment, which saw sales increase by 20.4% to RMB 557.5 million on the back of steady expansion of its distribution network in China.
The group’s gross profit margin fell 2.7 percentage points to 36.4% in 1Q18, mainly due to a change in product mix and lower average selling prices for a limited range of products as a result of Sino Grandness’ price adjustment exercise to maintain market competitiveness.
Distribution and selling expenses jumped 32.7% to RMB 150.7 million, mainly due to an increase in advertising and promotional expenses.
As at end March, cash and cash equivalents stood at RMB 916.0 million.
“In order to extend and diversify our product range, we have continued to invest resources to develop and launch new beverage products,” says Huang Yupeng, chairman and CEO of Sino Grandness. “These efforts have yielded positive results as we now derive sales from a wider range of beverage products.”
Looking ahead, the group says it will continue to invest in various advertising and promotional activities as well as sales and marketing initiatives in order to enhance its brand visibility and expand its online and offline distribution network.
Shares of Sino Grandness closed 1 cent higher, or up 4.8%, at 22 cents on Tuesday.
