Chinese infant formula producer Feihe International has reported mixed results for its third quarter of 2011, with its operating profit more than quadrupling but tax costs hitting its bottom line.
The company yesterday (14 November) reported operating income of US$3.2m for the three months to the end of September, up from $708,813 a year ago.
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The jump in operating profit came on the back of a 22.6% increase in revenue to $75.4m. Feihe said sales of milk powder increased and said more sales of “high margin” infant formula milk powder had boosted the results.
Nevertheless, Feihe’s gross margin dipped from 41% in the third quarter of 2010 to 36.5% this year due to the higher cost of raw milk and added nutrients.
The company’s net income reached $472,650, a sharp fall from the $3.6m it recorded in last year’s third quarter. Feihe’s tax costs increased, while it also recorded a $2m loss from discontinued operations.
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By GlobalData
