China Mengniu Dairy saw its profits fall in the first half of the year as sales were hit, in part, by “lower-than-expected” demand.
The Hong Kong-listed firm posted a 6.9% fall in half-year revenues to 41.57bn yuan ($5.83bn), which contributed to a 16.2% drop in profits to 2.05bn yuan.
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Mengniu’s first-half performance follows a decline in sales and profits in 2024.
Reflecting on the opening six months of 2025, the company said a “persistent oversupply of raw milk” and a “lower-than-expected” recovery in consumer demand meant an “imbalance” between supply and demand in China’s dairy industry continued.
However, Mengniu insisted the sector “still holds vast long-term potential and structural development opportunities”.
It pointed to recent government measures to boost domestic demand and to support parents’ childcare costs.
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By GlobalDataMengniu said it had invested in innovation and distribution. The company is looking to boost its presence in “lower-tier markets” and in “high-growth channels” including convenience and e-commerce.
During the first half of the year, Mengniu’s milk-formula division reported a 2.5% increase in revenue to 1.68bn yuan.
However, the business only accounts for around 4% of Mengniu’s turnover. The company’s largest division is liquid milk and, amid pressure on ambient sales, that side of the business saw its sales decline 11.2% in the first half of the year to 32.19bn yuan.
In 2024, Mengniu’s revenue fell 10.1% to 88.67bn yuan, with the company again citing the “imbalance” between supply and demand.
The group recorded a profit attributable to owners of the company of 104.5m yuan, down sharply from 4.81bn yuan in 2023.
Mengniu’s bottom line was, in part, hit by impairment losses of goodwill and intangible assets from Bellamy’s, the Australian infant-formula business it acquired six years ago.
