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News and analysis on the global poultry
and animal feed industries.
on August 20, 2009

Yuhe International reports rising profits in Q2

Main driver for growth was sales volume of day-old broilers.

Shandong-based Yuhe International Inc., a leading Chinese day-old broiler supplier, announced Aug. 14 its net revenue reached US$9.8 million in the second quarter of 2009, with a 75.5% growth rate on the year-to-year basis. 

Specifically, for the three months ended June 30, its gross profit, net profit and operating income respectively reached US$2.8 million, US$2.1 million and US$2.1 million, an increase of 52.6%, 79.5% and 60.6% compared to the same period of 2008, according to the company.

At the same time, cheaper pork and seasonal fluctuations weakened demand, causing a 24% decline in its selling price of day-old broilers. Its gross margin decreased from 32.8% in Q2 2008 to 28.5% in Q2 2009 as a result of early retirement of parent breeders this year.

The increase of its net revenue was mainly driven by 117.8% growth rate in its sales volume of day-old broilers – from 11.8 million in Q2 2008 to 25.7 million in Q2 2009, according to the company.

With the help of day-old broilers sales growth, Yuhe is expected to reach US$50 million in total revenue and US$13 million in net income during the fiscal year 2009, said Gao Zhentao, the company's chief executive officer. 

Yuhe is the second largest day-old broiler breeder in China. Currently, 85% of its day-old broilers are distributed to 27 local agents in Shandong province.

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