Chinese food and beverage maker Tingyi has reported an increase in first-half profits as its control of advertising and promotional spending offset pressure from raw-material costs.
For the six months to the end of June, the Chinese food and beverage maker earned net profit of US$229m, up 15.9% on the year.
Tingyi’s gross margins fell but it said efforts to control its expenditure on advertising and promotions and a fall in distribution costs meant its EBITDA climbed 13% to $524.7m.
Sales in the six months increased by 27.6% to $4.14bn as revenue from each of the company’s main divisions increased.
However, profits from instant noodles, the group’s largest business, fell 2.7% to $106.7m. Tingyi pointed to the “rapid rise” in raw-material prices and said it had suspended plans to increase prices as it supported China’s “national policy of price stability”. Sales from Tingyi’s instant noodles arm increased 22.4% to $1.6bn.
Meanwhile the company’s bakery division saw profits soar, by 215% to $3.1m, due to an increase in sales growth and a “price adjustment” that offset rising raw-material and labour costs.
Turnover in the division increased by 21.7% year-on-year to reach $94.4m, representing 2% of the group’s total turnover.