BRIEF: Mengniu’s profit evaporates on flood of charges
Dairy producer China Mengniu Dairy Com. Ltd. (2319.HK) said on Tuesday it expects to report its 2024 net profit tumbled to between 50 million yuan ($6.9 million) and 250 million yuan from 4.81 billion yuan the previous year.
It blamed the decline on several factors, including falling raw milk prices and weak consumer demand. The company also said impairment charges related to its Bellamy’s Australian subsidiary will have an expected impact of 3.8 billion to 4 billion yuan. Fair value changes for dairy cows belonging to its China Modern Dairy (1117.HK) associate added an additional 790 million yuan to 900 million yuan in losses.
The company stressed that the charges are non-cash in nature, and thus won’t have any material adverse effect on its current and future operations or cash flow. Shares of Mengniu opened up 2 % on Wednesday and continued to rise through the session. They were up about 10% in afternoon trading.
By Lau Chi Hang
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