Chinese dairy group American Dairy insisted that its branded formula business has returned to growth despite posting a year-on-year drop in revenues.
The company said that sales for the first quarter totalled US$81.4m, down from $113.8m reported in the first quarter of last year. However, American Dairy emphasised that revenues had returned to strength from a weak fourth quarter, when sales totalled $44m.
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“The results speak to the strength of our brand and market position, and reflect our efforts to address the issues with cross-territory selling identified during the previous quarter,” chairman and CEO Leng You Bin commented.
“Our branded infant formula resumed its growth momentum, growing to $64.8 million, up substantially from $20.7 million in the fourth quarter of 2009,” he added.
Infant formula sales accounted for 79.6% of total sales, up from 47.2% of sales in the fourth quarter of last year but down from 94.5% of sales in the first quarter of 2009.
Gross profit was $38.4m in the first quarter of 2010 compared to $72.6m in the first quarter of 2009 but up “substantially” from a gross loss of $3m in the fourth quarter of 2009.
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By GlobalDataAmerican Dairy said that it was “confident” that measures taken to address operational issues that hurt its fourth-quarter performance had been “effective”.
The group predicted revenue “in excess” of $60m in the second quarter.
