HONG KONG, March 26 (Reuters) - China Mengniu Dairy Co Ltd said profit jumped by a quarter in 2013 as China’s biggest supplier of dairy produce freshened up its portfolio and strengthened its brands while Beijing fostered industry consolidation amid tighter regulation.
Mengniu said in a statement on Wednesday that 2013 net profit grew to 1.63 billion yuan ($263 million), up from a 1.30 billion yuan a year earlier, restated due to revised accounting requirements for International Financial Reporting Standards.
The 2013 profit was ahead of a forecast of 1.51 billion yuan from Thomson Reuters’ Starmine SmartEstimate.
The company posted a profit of 881.4 million yuan in the second half of 2013, up 34 percent from 658.4 million in a year ago period, according to Reuters’ own calculation. Revenue for the full year rose 20.4 percent year on year to 43.36 billion yuan.
Mengniu said it has benefited from closer government scrutiny of China’s dairy industry to boost consumer confidence, and efforts by Beijing to promote consolidation in a fragmented sector. The government has set higher entry barriers, and investigated monopoly practices on imported milk formula products as it relaxed the country’s one-child-per-family policy, the company said.
“In light of the determination of the Chinese government to restore consumers’ confidence in domestic dairy products, we envisage wider policies to further regulate the domestic dairy product market,” chief executive officer Sun Yiping said in an earnings statement.
Booming Chinese demand for dairy products has sparked a raft of deals in the country’s dairy sector. Local food-safety scares have also boosted demand for foreign baby milk formula, pushing Chinese dairy firms to seek ties with foreign makers.
In February, France’s Danone said it was spending 486 million euros ($665 million) to boost its stake Mengniu to 9.9 percent from 4 percent, making it the China’s top diary firm’s second-biggest shareholder after state-owned COFCO.
Shares of Mengniu have fallen 3.4 percent so far this year, outpacing a 6.8 percent fall in the benchmark Hang Seng Index . ($1 = 6.2024 Chinese Yuan) (Reporting by Donny Kwok; Editing by Kenneth Maxwell)