Profits at China-based infant formula maker Emerald Dairy fell during the first quarter of the year as the company spent more on advertising and promotion.
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The company booked first-quarter operating income of US$79,026 – compared with $665,676 a year earlier.
Emerald Dairy said its selling expenses more than doubled as it upped spending on advertising, promotion and distribution. Revenue soared 77.4% to $10.4m.
CEO Yang Yong Shan said the investment would help Emerald Dairy expand into China’s regions.
“Our operating results included significant up-front costs in advertising and promotion activities [but] we are confident that this investment will bring long-term benefits as we continue to penetrate tier-2 and tier-3 cities,” Yang said.
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By GlobalData
