China snack maker Want Want says 2013 profit up 24 pct, boosted by cost control
SHANGHAI, March 11
SHANGHAI, March 11 (Reuters) - Want Want China Holdings Ltd , China's top food and beverage maker and distributor by market value, said 2013 net profit jumped nearly a quarter as it spent less on sales and marketing promotions.
Want Want, which makes dairy products, snack foods and rice crackers, said on Tuesday that net profit for the year ended December was $687.3 million, up 24 percent from $553.8 million a year earlier. That beat market expectations of $651.8 million, according Thomson Reuters Starmine SmartEstimates.
The company, which has a market value of $18.5 billion, said its revenue rose 14 percent to $3.82 billion. It said its gross profit margin increased 2.0 percentage points to 41.5 percent, citing higher retail prices, a fall in cost of certain key raw materials and optimization of its product mix.
But profit growth in the second half of the year - around 17.6 percent, according to Reuters calculations - was the slowest since 2010, in part hindered by a shortage in domestic milk powder supply. Dairy products make up over half of Want Want's total revenue.
Want Want competes with Tingyi Cayman Islands Holding Corp , China Mengniu Dairy Co Ltd, and Uni-President China Holdings Ltd, as well as global rivals including Nestle SA, PepsiCo Inc and Danone SA.
The company estimates its capital expenditure for 2014 will be $458 million, up by two-thirds percent compared with last year, according to a presentation on the results. Around two-thirds of the money will be spent on buying land and building factories and warehouses to help expand capacity in dairy products and drinks.
Shares of Want Want - up 1.29 percent on Tuesday - have fallen 1.8 percent so far this year. The benchmark Hang Seng Index has dropped 4.3 percent. (Reporting by Adam Jourdan; Editing by Kenneth Maxwell)
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