American Dairy, a producer of milk powder and soybean products for the Chinese market, has reported a 157% increase in net profit on the back of increased margins and revenue.
Net income rose by 154% to US$5.5m, or $0.32 per diluted share, in the third quarter, up from $2.2m, or $0.14 per diluted share in 3Q05. Revenue rose by 129% to $32.6 while margins improved to 53.2%, from 47.5% on the comparable quarter a year ago. Gross profit increased a staggering 157% to $27.3m in the quarter.
Leng You Bin, CEO and president of American Dairy said: “Today we are reporting the best operating results in the history of our company, driven by demand for our leading infant formula and milk powder products in China. Our record results reflect the fundamental strength of American Dairy, and we are particularly pleased with our sequential financial performance from the second quarter of 2006. For example, despite the seasonal slowness associated with the third quarter’s hot summer months, we increased our net income by 35% excluding the $1.2mof VAT rebates recognised in the second quarter of this year. We also continued to reinvest in our business with a focus on solidifying the Feihe brand and on our ongoing construction projects, which enable us to capitalize and deliver on anticipated future growth.”
American Dairy reiterated its previously announced financial expectations for fiscal 2006. The company said that it anticipates revenue of $120m, up 76%, and net income of $20m, up 72%.