Xiwang Food’s Performance in 2012

By CnAgri2012-07-18 15:40:07 Print

Xiwang Food Co., Ltd. has recently issued a report, predicting its profit to be RMB39 ~ 40 million in the first half of this year, down 24 ~ 25% on the year-on-year basis. Causes for its profit decline include the following:

First, short-term loans totaled RMB790 million at the end of the first quarter of this year, an increase of RMB400 million on the year-on-year basis. The loans were used to purchase corn embryos for corn oil production. Besides, financial expenses reached RMB28 million in the first half of this year, a sharp increase on the year-on-year basis.

Second, while corn embryo price rose 10% in the first half of this year, bulk corn oil price dropped 10% to a level of RMB9,100/MT, slashing the company’s profit ratio by 50% on the year-on-year basis.

The company’s bottled corn oil sales and profit ratio are estimated to increase 43% and 5% respectively in the first half of this year on the year-on-year basis.

The company’s profit is expected to pick up in the second half of this year for the following reasons: First, bottled corn oil sales may reach 90,000 MT in the normal busy season of sales in the second half of this year. Second, soyoil price is presumed to move up in the fourth quarter, conducive to bulk corn oil price upturn. Third, financial expenses are predicted to grow at a slower pace in the second half of this year than the same period of last year.

From "China Oil and Oilseeds Market Weekly Report"