China Huiyuan Juice Group, the country's largest fruit-juice maker which Coca-Cola is planning to buy, said its operational profits decreased nearly 70 percent after costs rose and sales were hurt by snowstorms and an earthquake.

However, the disappointing results will not affect the US giant's bidding price, which is three times the market value of the Chinese company, Huiyuan said yesterday.

The company's earnings excluding gains from the revaluation of convertible bonds fell to 109.8 million yuan, or 7 cents a share, for the six months ended June 30, from 350.1 million yuan, or 25.8 cents a share, the Beijing-based company said on Tuesday night in a statement to Hong Kong's stock exchange.

"The severe snowstorm and Sichuan earthquake took a toll on the group's first-half sales as well as on logistics in the relevant areas," said Francis Ng, Huiyuan's CFO.

"The cost pressure from growing material prices in the first half will ease in the second half of this year," he told reporters in a press conference yesterday.

The company is expanding its production capacity to tap the fast-growing juice market in China. It will be able to make 2.9 million tons of juice products a year by the end of 2008, up from 2.56 million tons at the end of June.

"The partnership with Coca-Cola will further develop the Huiyuan brand in a competitive global beverage market and provide a larger and more competitive platform for Huiyuan's business and employees," Huiyuan Chairman Zhu Xinli said in a statement.

(HK Edition 09/11/2008 page2)