US/CHINA: Charges hit Emerald Dairy 2010 profits
A series of charges hit Emerald Dairy's bottom line in 2010, the US-listed Chinese infant formula firm has revealed.
The company yesterday (18 April) recorded net income of US$3.1m for 2010, down from $4.2m a year earlier.
The fall in Emerald's net income came despite a 31% jump in gross profit to $27.1m and a 23.6% increase in net sales to $55.3m.
The group said it had recorded $7.1m in non-cash charges in 2010, including $5m in damages due to the extension of warrants previously issued by the company to meet "certain registration rights provisions".
Outside these charges, Emerald's operating expenses also rose from $11.7m in 2009 to $14.1m in 2010 on the back of higher advertising spending.
Nevertheless, CEO Yongshan Yong said a focus on the company's "higher-margin" products under the Xinganling brand had "significantly improved" revenues, margins and earnings.
"The results of the ongoing certification of dairy companies in China and our belief that many smaller players will simply not be recertified for operation will provide us an excellent platform to continue our growth especially in Tier 3 and Tier 4 cities in China," the Emerald chief added.
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