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ANNOUNCEMENT OF INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2015

 

 

Following is a summary of the performance of China Foods Limited (the “Company”) and its subsidiaries (together the “Group”) for the six months ended 30 June 2015 (the “interim period”)

together with comparative figures for the corresponding period of last year.

 

• Our Revenue increased by 9.54% to HK$15,081 million.

• Our EBITDA^ increased by HK$297.4 million to HK$743.5 million.

• Our Operating Profit * increased by 433% to HK$379 million.

• Our Profit attributable to the Owners of the Parent was HK$118 million, as compared to our Loss attributable to the Owners of the Parent of HK$135 million for the same period last year.

 

^ EBITDA represents earnings before finance costs, income tax expense, depreciation, amortisation of other intangible assets, recognition of prepaid land premiums, impairment related to goodwill, available-for-sale investments, items of property, plant and equipment and receivables, provision against inventories and share of profits in associates.

* Operating Profit of the Group represents the aggregation of segment results less corporate and other unallocated expenses.

In the first half of 2015, the growth rate of the food and beverage industry in Mainland China continued to trend down following a slowdown of the domestic macro economy in the country. As a result, the Group’s food and beverage businesses were presented with considerable challenges.

 

In the face of this unfavourable external environment, the Group nevertheless succeeded in implementing a series of initiatives in accordance with management plans formulated at the beginning of the year.

 

During the period, the Group continued to foster its “entrepreneurial culture” in order to improve operational efficiency. Measures were also taken to increase the number of points of sale by developing additional channels, and by penetrating markets at the county level. In addition, supervision and audit of marketing expenses, and execution at point of sale, were strengthened, with shortcomings identified, and successfully addressed, in order to improve the cost effectiveness of marketing expenditures. Specific incentive policies were also introduced to promote product innovation, and to enhance the efficiency of brand marketing. Training for business teams was improved, and the business team for each product category conducted a benchmarking project as against the best industry practice in relation to operational procedures, and supply chain and sales management. The Group’s organizational structure has been further streamlined. Active steps were taken to optimize headcount, and to reduce staff costs. The performance evaluation system was reviewed and more specific incentive measures were deployed to further improve the efficiency and competitiveness of our workforce. In addition, the internal control 15 system was further strengthened to reduce operational risks. As a result of these measures, the Group has made significant improvements in its overall operational quality and efficiency.

 

In the second half of 2015, the Group will continue in implementing the above mentioned initiatives. We will focus on promoting performance evaluation system reform and innovation in order to enhance the initiative, sense of responsibility, and performance of our workforce. In addition, the Group will further initiate innovative marketing campaigns, accelerate new product innovation to cater for consumers’ demands, and further explore sales opportunities in emerging distribution channels such as e-commerce. With these initiatives, we will strive to improve our results for the full year 2015.