DaChan's Core Operations Turnover Steady, Overseas Feed Growth Robust

BY  | FROM GLOBE NEWSWIRE | 2014-04-29 10:38

  HONG KONG, April 27, 2014 (GLOBE NEWSWIRE) -- As the leading chicken meat products supplier in China, DaChan Food (Asia) Limited ("DaChan Food" or the "Company", stock code: 3999) announced its results for the three months ended 31 March 2014 on 25 April. Due to the extension of last year's sluggish trend in the breeding and rearing industry, the lack of proper understanding by the public towards chicken consumption and reduced demand as the government calls for more modest lifestyles, the turnover of the Group for the first quarter was RMB2.68 billion, representing a slight decrease of 1.6% over the same period of last year. The professional food business managed to maintain a turnover at level similar to last year despite of the occurrence of H7N9 and weak consumption demand. The meat product business utilized the excellent breeding and rearing platform and professional services to proactively expand the breeding business and sale of contract feed and day old chicks business. However, meat product turnover decreased as a result of weak retail meat prices. The feed business in Southeast Asia continued to record significant growth, which enabled the overall feed business turnover to remain stable.

  During the period under review, overall gross profit of the Group decreased mainly due to decline in the price and turnover of meat products and processed chicken meat as the demand for chicken meat decreased. Feed for external sales benefited from improvements in product structure and raw material costs, which in turn led to significant rise in gross profit and gross profit margin. During the first quarter, the Group properly controlled one-off channel building expenses, resulting in a decrease of expenses. Overall, the Group recorded a slight loss of RMB7.16 million for the quarter.

  Mr. Han Jia-Hwan, Chairman of the Board of DaChan Food, said, "Although breeding and rearing of both broiler and swine experienced significant challenges in China during the past two years, DaChan has been committed to ensuring the effective operation of the "safe-assuring and traceable" food system covering the entire production chain. Through successful implementation of the strategy of 'de-risking, enhancement of food production", the Group maintained smooth operation, steady cooperation with farmers and protected the interest of shareholders. It is expected that the breeding and rearing industry will reach the trough in this quarter and recover during the year. The "China Broiler Alliance" formed by major broiler suppliers in the PRC also brings hope to the broiler farming industry. As the industry recovers in the future and with the constantly upgraded traceability system, the "Sis's Kitchen" brand of the Group will have a greater influence in the retail market.

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