China Yurun Food Group has seen profits soar in the first half of the year as sales jumped.

The meat processor today (17 August) reported an increase of 22.9% in profit attributable to shareholders for the six months ended 30 June to reach HK$1.61bn (US$206.7m).

Core net profit, which excludes government subsidies, negative goodwill and foreign exchange gains, jumped to HK$1.21bn, marking an increase of 70.8% from the same period last year.

Despite the improved bottom line, Yurun Food’s gross profit margin dipped from 15.5% to 12.6% as a greater proportion of the company’s sales was made up by upstream products, it said.

The group’s turnover reached HK$16.46bn, up 89.3% compared with the first six months of last year. This was due to the group’s “production capacity allocation and branding, success in capturing the market demand for quality meat products, as well as the market-oriented sales strategy in its upstream business”, the company said.

Yurun Food chairman Zhu Yicai added: “In the first half of 2011, domestic consumption in China continued to be promising, which provided a favourable business environment for the Chinese meat product market.”

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Zhu said Yurun’s nationwide hog production network, its “flexible combination” of upstream and downstream products, its “market-expansion strategy” and “favourable” government agricultural policy meant the company “overcame a series of challenges and maintained a steady and remarkable growth”.

He added: “The group will continue to implement its selective production capacity expansion strategy and proactively extend its distribution channels so as to capture business opportunities from industry consolidation and steadily expand its market share, target to create satisfactory returns for its shareholders.”