Vinamilk said higher costs and moves to protect market share hit second-quarter profits

Vinamilk said higher costs and moves to protect market share hit second-quarter profits

Vinamilk, Vietnam's largest dairy processor, has reported a fall in profits for the first six months of a year when it has said it will protect domestic market share.

The group, said to account for three quarters of dairy product sales in Vietnam, posted a 13.4% drop in net profit to VND2.99trn (US$141.2m). Pre-tax profits slid 11.1% to VND4.09trn.

In a separate disclosure to the Ho Chi Minh Stock Exchange, Vinamilk said its moves to maintain market share, including promotions, a "sharp" rise in cost of goods sold and an increase in the tax bill for some of its plants weighed on net profit in the second quarter of the year, which fell 15.8%.

In April, Vinamilk forecast its net profit would fall 8.3% in 2014, with pre-tax profits down 6%.

At the time,the company told just-food it was willing to "sacrifice" profit for market share this year in the face of weak domestic consumption. It also said it wanted to invest in overseas markets.