China Resources upbeat on 2014 as profit plunges

China Resources upbeat on 2014 as profit plunges

China Resources Enterprise Ltd has booked a steep drop in 2013 profits, which fell by 52% on weaker contributions from its retail and food manufacturing businesses.

The Hong Kong listed food, beverage and retail giant booked net profit for the 12 months to end-December of HK$1.91bn (US$246m), down from HK$3.95bn in 2012. Net profit from the group's retail business fell 65% due to higher labour costs. Net profit from the firm's food processing unit declined 84% on higher input costs.

These declines more than offset a 15% rise in profit from China Resources' beer division and a 23% rise in profit at its beverage arm.

China's leading supermarket operator said group sales rose 16% to HK$146.41bn in the period, up from HK$126.24bn.

Despite the weaker profits, China Resources was upbeat on the prospects for 2014.

The company emphasised that its joint venture agreement with UK retailer Tesco, expected to close in the first half of the year, will provide it with the tools to expand in China's retail sector. "The joint venture aims to become the leading multi-format retailer in Greater China, and targets faster growth and enhanced profitability," the company said.

Chen Lang, chairman, added that the group plans to "leverage economies of scale" to "enhance operational efficiency and strengthen our profitability as a whole".

Click here to view the full release from China Resources.