Synear Food posts 62.9% fall in 3Q net profit to $1.4m

Synear Food Holdings, one of China’s leading quick freeze food producers, says net profit for the three months ended September 30, 2011 (3Q11) declined 62.9% to RMB 7 million ($1.4 million) from RMB 19 million a year ago (3Q10) due mainly to higher operating costs and income tax expenses. Revenue was up 5.6% to RMB 421.2 million in 3Q11 from RMB 398.9 million in 3Q10 on the back of higher sales across the group’s three product segments.

Synear Food says the group was affected by bad publicity concerning the recall of its products when a batch was tested positive for minute traces of the staph bacteria. Consequently, it expects that its sales in the fourth quarter to be negatively affected. In addition, the group continues to face cost pressures from rising raw material prices and labour costs.

The group therefore expects the economic climate and business conditions to remain very challenging in the next reporting period and in the next 12 months.