Chinese meat processor Zhongpin saw its profits increase in fiscal 2011, boosted by higher sales and expansion of its operations.
For the 12 months to the end of December, net profits climbed 10.2% to US$54.2m, primarily due to revenue growth from higher tonnage sold at higher average prices and effective control of expenses. This was partly offset by higher selling expenses in support of sales and market expansions and higher interest expenses, the firm said.
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Operating profits in the period amounted to $86.4m, a 34.4% increase on the prior-year period.
Revenues increased 54% to $1.46bn in 2011 from $946.7m in 2010. Zhongpin put the growth down to higher pork prices and higher pork sales volumes as a result of an increase in the number of retail channels, geographic expansion, and higher sales to chain restaurants, food service providers, and wholesalers and distributors in China.
“We continued to deepen our penetration in our current markets and aggressively increase our geographic markets, sales locations, customers, and operations in 2011 to support higher sales, profits, and operating cash flow in the years ahead, so the year was good in operations,” said Zhongpin chairman and CEO Xianfu Zhu.
The company said it will slow the rate of its capacity expansions in 2012, and focus on “greater use of existing facilities”, which it said should help its financial results.
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By GlobalDataDespite a “challenging” competitive environment expected in 2012, Zhongpin said it expects to report full-year revenues in the range of $1.55bn to $1.72bn, and diluted earnings per share between $1.36 and $1.92.
