Infant formula maker Beingmate Baby & Child Food reported a loss of CNY798m (US$116.19m) for 2016, a year that saw the company’s profit hit by a counterfeiting racket and ongoing upheaval in the Chinese formula sector.
The company said that its net earnings plunged by 870%, dropping from a profit of CNY103.6m in 2015. Operating profit fell by 974% to a loss of CNY659.7m compared to an income of CNY75.5m in the prior 12 month period.
In a preliminary statement to the Shenzhen Stock Exchange, Beingmate flagged the negative impact of revelations its infant formula was being counterfeited. A group of underground factories was uncovered that had been making fake infant formula under brands including Beingmate and Abbott, which is owned by US healthcare company Abbott Laboratories.
The company also said that while its online sales were “strong” revenue from traditional sales channels “fell violently”. Group sales dropped 39% to CNY2.77bn. In 2015, the baby food maker reported sales of CNY4.53bn.
Beingmate had warned last month that it expected losses of CNY750-800m in 2016.
In September last year, Beingmate announced plans to establish a new dairy joint venture with two Chinese private investors.
Located in Beihai, a city of China’s southern autonomous region of Guangxi, the venture – Beihai Beingmate Dairy – would initially manufacture condensed milk, with other products to follow, the group said. The company has not named the two investors.