Statistics

China Resources Q4 net jumps, positive on 2010

(Agencies)
Updated: 2010-03-25 17:23

Consumer-sector focused China Resources Enterprise on Thursday posted a sharp jump in fourth quarter earnings, fueled by growing sales in supermarket and brewery operations, and aims to expand its presence in China's retail sector.

The company said it anticipates both the macroeconomic environment and consumer spending on the mainland to extend gains.

"In 2010, the Group's operating environment is expected to improve further on the back of a strengthening economy and the central government's policy in spurring domestic consumption," chairman Qiao Shibo said in an earnings statement to the Hong Kong Stock Exchange.

"Moving forward as a pure consumer play, we will keep strengthening our three core businesses to improve our profitability while actively extending our presence in the fast-growing China consumer market," Qiao said.

China Resources, owner of the country's top beer brand, Snow, saw profit for the December quarter rise to HK$709 million ($91.4 million) from HK$163 million a year earlier, when the global financial crisis hit its retail, food processing and distribution businesses, based on Reuters calculations using company data.

Revenue rose to HK$16.82 billion in the quarter from HK$14.49 billion a year earlier, according to Reuters calculations.

Shares of China Resources Enterprise retreated from an early loss and rose 2.2 percent to HK$28.05 by 0642 GMT.

The company posted a profit of HK$2.91 billion for 2009, up 25.5 percent from HK$2.32 billion in the prior year.

Underlying profit from continuing operations was HK$1.74 billion in 2009, against a restated HK$1.56 billion, and HK$1.79 billion as stated in its 2008 statement.

For the full year, revenue from retail operations rose 12 percent to HK$35.94 billion, accounting for 50.2 percent of the total, while beverage sales were up 17.6 percent to HK$20.47 billion, accounting for 28.6 percent of the total revenue.

Earnings contributed by the food business rose by 12.2 percent to HK$350 million, the company said.

"We will take advantage of our economies of scale and continue to enhance cost and operational efficiency in order to ride on the benefits emerging from the gradual economic recovery," managing director Chen Lang said in a statement.

In December, Beijing-backed China Resources Enterprises, which operates supermarkets, processes meat, and produces its Snow-brand beer with SABMiller Plc, said it would record a HK$3.2 billion gain from the sale of its stake in a 10-year old joint venture with fashion group Esprit for HK$3.88 billion.

In October, the company said it aimed to focus on the rapidly growing consumer market on the mainland through an asset swap with a major shareholder, in a deal valued at nearly HK$5 billion.

The shares were up 25.7 percent in the fourth quarter of 2009, outperforming a 4.4 percent rise in the broader market.