Chinese infant formula producer Feihe International recorded a net loss for 2010 on the back of a decline in revenue.
The manufacturer said today that for the full year ended 31 December, it recorded a net loss of US$49.6m against a $19.6m net profit in the same period of 2009.
Revenue fell by 5.2% for the year to $257.1m, while the company said contributions from branded milk powder sales were down from 79.7% to 70.1% of sales. It attributed the decline to “increased competition from new competitors entering into the Chinese dairy industry and old competitors aggressively attempting to reclaim market share following the melamine crisis”.
However, Feihe International swung into profit during the fourth quarter, recording $1.9m net income, against a $27m loss during the same period of 2009.
Revenue was up 41.6% to $62.3m, while revenue from branded milk powder products was 63.4% of total sales, versus 47% of total sales in the fourth quarter of 2009.
Feihe International chairman and CEO Leng You Bin said: “The increase in revenue in the fourth quarter of 2010 compared to the fourth quarter of 2009 was primarily attributable to an increase in sales of branded milk powder, as well as the continued commitment to making improvements across all functions including effectiveness of operations. The revenue in the fourth quarter of 2010 increased 2.0% sequentially from $61.1 million in the third quarter of 2010, primarily reflecting the company’s efforts to increase sales at existing retail sales points.”