On October 22, COFCO Sugar released its
2024 third-quarter report. For the first three quarters, the company achieved
operating revenue of RMB 22.713 billion, a YoY decrease of 4.86%, with a net
profit attributable to shareholders of RMB 1.162 billion, down 19.33% YoY.
Basic earnings per share were RMB 0.5434.
In the third quarter alone, operating
revenue reached RMB 7.757 billion, a 30.41% YoY decline, while net profit
attributable to shareholders was RMB 300 million, down 55.41%.
Additionally, the net cash flow from
operating activities in the third quarter was RMB 1.38 billion, a decrease of
58.83% year over year.
The report shows that the company’s
operating revenue and net profit fell sharply YoY in the third quarter. The
main reason, as explained by the company, is the contraction in the scale of
sugar processing and trade compared to the previous year.
Signs of Decline in COFCO Sugar's Performance
The downward trend in COFCO Sugar’s
performance appears to have continued into the third quarter of this year.
According to the company’s half-year report, COFCO Sugar’s main revenue in Q2
was RMB 7.145 billion, a YoY decrease of 9.9%, with net profit attributable to
shareholders at RMB 422 million, down 14.64% YoY. The gross profit margin
dropped by 13.58 percentage points to 10.42%, and the return on equity fell
from 10.48% to 7.71%. In addition to industry factors, the company’s investment
income for the first three quarters was only RMB 26.49 million, compared to RMB
193 million in the same period last year.
Public information shows that COFCO Sugar
is one of COFCO Group’s core businesses. It is a major player in sugar
production and importation in China and is also the largest tomato product
producer globally.
Sugar Prices Remain Sluggish
In the second and third quarters of this
year, sugar prices fell significantly compared to the same period last year,
impacting revenue and reducing profit margins for sugar producers. White sugar
futures prices have been volatile this year, dropping by 12.96% from January to
August. However, due to expectations of reduced production, white sugar futures
saw a small rebound, rising by 8.61% between August 23 and October 9. After
this rebound, domestic production for the new sugarcane season will fully
commence in the fourth quarter, which is expected to increase sugar output to
some extent. Under this strong expectation of increased production, sugar
prices may continue to face pressure in the short term.
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