Want Want China Holdings posted a slump in first-half revenue and profits, which the snack maker attributed to distortions due to the timing of the Lunar New Year and a rise in raw material costs.
The Shanghai-headquartered company said today (23 August) total sales dropped 3.7% to CNY9.35bn (US$1.4bn) in the six months through June from a year earlier. The biggest decline in its four business areas was seen in rice crackers, where revenue slid 5.7% to CNY1.95bn.
China accounts for 90% of the firm’s business, making it susceptible to swings in demand from the timing of the new year holidays, which change each year but fall within the first three months. Want Want said it sees the biggest appetite for its products, especially rice crackers, in the 90 days leading up to the celebrations and so plans to change the fiscal year-end to 31 March from 31 December.
For the Hong Kong-listed group, first-half EBITDA fell almost 11% to CNY2.5bn, while profit attributable to shareholders declined 15% to CNY1.5bn. The cost of sales, mainly related to raw materials prices, increased 2.3% to CNY5.2bn.
Want Want China conducts most of its business in Taiwan, Japan, Hong Kong and Singapore, as well as China. Its three other main product areas are dairy products and beverages, snack foods including candy and popsicles, and “other” categories such as wine.
The dairy division reported a 3.1% decrease in revenue for the half to CNY4.5bn. For snacks, earnings dropped 3.5% to CNY2.8bn, which the company said was attributable to counterfeit issues for certain products as well as the Chinese New Year.
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