Net profit for China Minzhong dips 6.4% on higher tax expenses

Chinese vegetable processor China Minzhong Food Corp has posted a 6.4 per cent slip in net profit for its second quarter over a year ago.

Net profit was 201.9 million yuan (S$41.9 million) for the three months to Dec 31, due to higher income tax expenses, the company said on Friday.

The group said it sold a higher proportion of taxable products, such as brined products, in the quarter. Other products, including fresh-packed products and fresh vegetable produce, are tax-exempted.

The group's revenue for the quarter rose 5.1 per cent over the previous year to 905 million yuan, driven by higher sales in its cultivation and branded business segments.

For the six months to Dec 31, the group recorded a 25.8 per cent drop in net profit over the year before to 250.3 million yuan, despite revenue rising 4.6 per cent to 1.5 billion yuan in the period.

China Minzhong's executive chairman and chief executive Lin Guo Rong said the company's expansion into industrialised farming is "a step in the right direction" given the trends of rising labour costs and a shortage of farmers due to government urbanisation programmes.

The move will create higher productivity and cost efficiency, and allow the group to "harvest all year round without weather disruption", he added.

Mr Lin also said the firm is experimenting with the use of industrialised farming methodology for other high-value crops to capitalise on the rising affluence in mainland China.

China Minzhong's quarterly earnings per share was 0.31 yuan, down from 0.39 yuan in the same period a year ago.

Net asset value per share for the group stood at 7.54 yuan as at Dec 31 last year, up from 7.28 yuan as at June 30 last year.

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