CHINA: Tingyi cautious on ingredient costs
Chinese noodle maker Tingyi Holding Corp. has reported a rise in net profit during 2009, but warned that rising ingredient prices will pressure sales and margins in the coming months.
For 2009, net profit rose by 47% to US$383.2m, the Master Kong maker said today (23 March).
Sales increased 9% to $5.1bn, as sales of instant noodles grew by 10.7% to US$2.3bn.
Improved product mix and rising sales of high-end noodles propelled gross margins, which rose to 34.6%, up from 32.2% in 2008, the company said.
However, Tingyi warned that ingredients costs will likely rise this year, with the cost of flour, palm oil, PET resin and sugar all expected to go up.
The company indicated that it will look to control production costs and boost operational efficiency. Tingyi also hopes to continue to expand sales of higher-margin products.
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