Ausnutria Expects Strong Profit for Q3

Hong Kong-listed dairy firm Ausnutria Dairy Corporation (HKEX:1717) has announced a positive profit alert for the third quarter of this year, with sales and profit attributable to shareholders expected to increase significantly during the said period.

Ausnutria, which specializes in the manufacture and distribution of infant formula and nutrition products with production facilities based in the PRC, the Netherlands and Australia, anticipate that it will record profit attributable to the shareholders in the range of RMB135.0 million to RMB139.0 million for the 3Q2016, which shows a significant growth when compared with RMB9.7 million for the corresponding period in 2015.

The significant increase was partly due to the one-off inventory write-off (the “Inventory Write-off”) in the Netherlands of approximately RMB97.8 million for the same period of 2015.

When compared to the adjusted profit attributable to the shareholders for the corresponding period of RMB47.1 million, which excludes the impact of the Inventory Write-off, profit attributable to the shareholders in 3Q2016 represented an increase of RMB87.9 million to RMB91.9 million (186.6% to 195.1%).

Ausnutria believes that the incurrence of the expected improvement in financial performance of the Group is primarily attributable to the continuous increase in the sales of the Group which was driven by the adjusted business strategy.

Sales of the Group for the 3Q2016 is anticipated to increase by 28.8% (approximately RMB1,893.2 million), among which, the Group’s own-branded cow and goat milk-based infant formula products in the PRC are anticipated to increase by 65.4% and 29.6%, to approximately RMB667.4 million and RMB461.2 million, respectively when compared with the same period of last year.

Besides, after the processing and facilities upgrading plan of the factories in the Netherlands was completed at the end of 2015, there is a turnaround in the financial performance of the operations in the Netherlands, which also drives the growth of the Group.

In the third quarter of 2016, the development of Ausnutria’s business continued to be promising: In August, it entered into the international nutrition market by acquiring Nutrition Care, a professional nutrition company in Australia.

In September, it signed an agreement to set up a joint venture with New Zealand’s second largest dairy co-operative, Westland, to build a new milk powder mixing and packaging production plant at Rolleston in New Zealand, which aims to expand the strategic layout along the global golden milk source.

Mr. Yan Weibin, Chairman of the Group, said, “We are encouraged by the performance in the first three quarters of 2016, and Ausnutria is ready to meet the important opportunities and industry challenges brought by national policies. The Group will continue to increase production capacity, and work on the integration of the upstream industry chain, achieve the diversification of downstream products, enhance the development of our own-brand business, and enter the nutrition industry, to become a global leading formula and nutritional food supplier, nutrition and health consultants and service provider. With our good foundations and our excellent customer service capability, we believe that the Group will achieve further growth and maximize the value of shareholders.” –