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Snow and quake affect Huiyuan H1 results

(Agencies)
Updated: 2008-09-10 14:32

Huiyuan Juice Group Ltd said its first-half net profit rose just 7 percent year-on-year to 367.34 million yuan ($53.71 million) because of the adverse impact of severe snowstorms and the earthquake in Sichuan during the period.

It said the result was also pressured by expenditure related to expansion of its production capacity and other initiatives aimed at bolstering the group's long-term growth and efficiency.

Sales dipped 5.8 percent to 1.29 billion yuan from 1.37 billion a year earlier, while earnings per share slipped to 0.25 yuan from 0.271.

Despite relatively flat earnings, Huiyuan Juice said it maintained its leading position in China's fruit juice beverage market based on data compiled by marketing research firm AC Nielsen.

AC Nielsen reported that Huiyuan Juice had a 43.8 percent share in sales-value terms in China's pure juice market in the first half of this year and a 42.4 percent share of the nectars market. AC Nielsen defines nectars as juice beverages with fruit juice content of between 26 to 99 percent.

Huiyuan Juice currently produces and supplies about 228 kinds of fruit and vegetable juice beverage products.

In a separate statement, Huiyuan Juice said its directors are of the view that Coca-Cola's offer to acquire the company, in a HK$19.45 billion deal, is in the best interests of the group, its shareholders, consumers and China's economy as a whole.

It said Coca-Cola has confirmed its intention "to use its expertise as a global beverage company to further develop the Huiyuan brand."

Huiyuan Juice chairman Zhu Xinli has agreed to serve as honorary chairman of the group following completion of Coca-Cola's takeover and will remain involved in its operations, it said.