HONG KONG, Nov 14 (Reuters) - Retail-focused conglomerate China Resources Enterprise (CRE) said on Thursday its third-quarter net profit fell 19.2 percent to HK$920 million ($118.66 million) from a HK$1.14 billion profit the same period a year ago.
The state-backed company said it was hurt by weaker retail demand and that it would step up expansion into smaller mainland cities after its profit from retail operations fell 82.8 percent during the period and food was down 76.4 percent.
CRE announced last month a tie-up with the world’s No.3 retailer, Tesco, potentially posing a challenge to hypermarket operator Sun Art Retail Group Ltd. CRE also said the new venture will start online initiatives in the future.
CRE, which owns China’s top beer brand Snow, said beer remained its major profit contributor, rising 49 percent to HK$749 million and beverage revenues overall were up 55 percent to HK$90 million.
Shares of CRE rose 4.1 percent on Thursday afternoon, outpacing a 0.7 percent gain in the Hang Seng Index.
Its biggest rival Sun Art is due to announce third-quarter results later on Thursday.