Chinese infant formula maker Emerald Dairy has booked a net loss in the first six months of the year.
For the period to the end of June, the company made a net loss of US$1m compared to a profit of $2.8m in the prior-year period.
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The drop was due, the company said yesterday (16 August), to liquidated damages it incurred during the year in connection with the extension of the expiration dates of a number of outstanding warrants, which offset an increase in gross profit.
Sales, however, climbed to $27.6m from $21.1m last year due to increased demand for the company’s products. The sales increase partially offset by a reduction in the average selling price for all products, by $80 per metric ton.
“We believe that a lack of adequate production capacity has been a significant impediment to our ability to increase our revenue in recent years,” the firm said. “Our growth strategy for the next three years will be primarily focused on expanding production capacity and strengthening sales efforts.
“Management plans to achieve this strategy by increasing our production capacity through the opening of our new production facility, and increasing both sales staff and advertising expenditures,” the company added.
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