China Yurun Food Group Limited a vertically-integrated meat-product processor and supplier in China, has announced its interim results for the six months ended 30 June 2009.
During the Period, the Group recorded HK$5,834 million (1H2008: HK$6,043 million) in turnover, representing a 3.5% decrease over the same period last year. The prices of upstream chilled pork and frozen pork were determined according to market prices of live hogs. In the face of significant price decrease of live hogs, the Group was able to increase its sales volume by 35.1% through its well-established sales network which has, to a large extent, offset the adverse impact of market price fluctuations.
In the past few years, based on its foresight and deep understanding of the pricing trends and cycles of live hogs, the Group has prudently expanded its capacity and implemented strategic policies. As a result, it is now reaping the benefits of economies of scale, enhanced capacity utilization, and significant reduction in unit cost. Furthermore, sales of relatively higher margin LTMP (Low Temperature Meat Product) and chilled meat products during the Period were proportionally higher, aiding to lift the overall gross margin.
Mr. Zhu Yicai, Chairman of Yurun Food, said, "Despite the challenging economic environment, we are pleased to announce our satisfactory 2009 interim results. Leveraging on its stringent quality control systems, strong brand recognition and successful strategic planning, the Group's core business was not affected by the H1N1 influenza during the Period; hog slaughtering volume increased by 35.6% as compared to the same period last year. Furthermore, the fluctuation of hog price in the first half of the year affected the Group's total turnover, but profit maintained satisfactory growth as a result of economies of scale, prudent live hog procurement and flexible inventory management."
During the Period, the Group acquired several slaughtering plants. One of the slaughtering plants has commenced trial production in May 2009 and other plants will commence production in the second half of the year and next year, which lays a solid foundation for sustaining growth in production capacity. As at 30 June 2009, slaughtering capacity of the Group reached 19.3 million heads per year, representing an increase of 1.25 million heads as compared to that as at 31 December 2008.