Aug, 26 - Xiwang Sugar Holdings Company Limited, the largest manufacturer and supplier of crystalline glucose and crystalline fructose in China, announced its interim results for the six months ended 30 June 2009 (the “Period”).
The Group reported a turnover of RMB 1.03 billion, representing a decline of 25.6% over the first half of 2008. Net profit amounted to RMB 1.1 million, which decreased by 99.5% compared with the same period of last year. Earnings per share were RMB 0.0016 (1H 2008: RMB 0.2633), with no interim dividends declared (1H 2008: Nil). Notwithstanding the decline of the overall financial results in the first half of 2009 to that in the first half of 2008, the Group had net cash inflow from operating activities of RMB 46 million. The Group continued to suffer from the adverse impact of the melamine scandal which happened in September 2008. The consumption of various sugar and sweetener-contained food such as dairy products and snacks was still weak, causing a drop in the demand for crystalline glucose. The sales volume was approximately 200,000 tonnes in the Period (1H 2008: approx. 250,000 tonnes). The quality of domestic feed products remained an issue after melamine was detected in eggs, particularly to the overseas customers, the sales performances of corn gluten meal and corn gluten feed in both domestic and export markets were seriously dampened. As a result, the Group recorded a loss in the first quarter of 2009. With the melamine scandal and global economic crisis dissolving, the average selling prices and the sales volume of key products started to climb since April 2009. Nevertheless, the net profit generated in the second quarter of 2009 was just sufficient to offset the loss incurred in the first quarter of 2009.
Xiwang Sugar Announces Interim Results 2009
On the other hand, the Group would launch the production of pharmaceutical-grade glucose and other new products. Certain existing production facilities were being upgraded, resulting in an overall lower utilisation rate of the plants. The Group had a lower corn processing volume of 550,000 tonnes during the Period compared to 590,000 tonnes in the first half of 2008.
International cane sugar price rose dramatically since the beginning of 2009, attributable to the suppressed harvest in India and Brazil. The cane sugar supply in China would probably fall below the demand. Such situation would drive up the prices of crystalline glucose and sweetener products. The current year per capita consumption of sugar in China was approximately 11kg, which is far below the international average of over 25kg. The increasing popularity of western diet means crystalline glucose and crystalline fructose will be fast growing products. The recent price of domestic pork and eggs were increasing, so the sales performance of animal feed products will improve.
Mr. Wang Yong, Chairman of Xiwang Sugar, commented on the Group’s prospect and development, “We produce healthy and functional sweeteners which are ingredients for food and pharmaceutical products. Nowadays, many health problems such as obesity and diabetes are correlated to catering, so more people would prefer healthy and natural sweeteners. Crystalline fructose will not cause a sharp rise in blood glucose, therefore it is suitable for the diabetics. Commercial production of it has just commenced. In China, increasing diseases are associated with longer life expectancy and prosperity. Pharmaceutical-grade glucose will be supplied to the medical industry which is enormous. Our products enjoy specific markets and distinctive niches, and we believe they will have very good future prospect.” Profile Xiwang Sugar Holdings Group Limited is the largest crystalline glucose producer in the PRC. It refines natural corn to a variety of sweeteners and corn co-products that are widely applied in food and beverage, animal feed, and many other consumer and industrial products.