January 7, 2009
Xiwang expects 2008 profit to fall 50 percent
Xiwang Sugar Holdings Ltd., a glucose and animal feed producer based in Shandong, said on Monday (Jan 5) that its annual net profit might drop more than 50 percent in 2008.
The company's net profit in 2007 was RMB360.9 million (US$52.8 million), indicating that its 2008 net profit will not exceed RMB180.45 million (US$26.4 million).
The company said the sharp drop in profits could be attributed to worsening operation environment in the second half of 2008.
The melamine-tainted milk scandal affected the demand and sales of dairy products and eggs, which in turn lowered sales of Xiwang's main products such as crystalline dextrose and fodder.
The ongoing global financial crisis has also affected Xiwang's export business. However, the prices of corn and key raw materials of the company fell sharply by year-end, which is seen as a boost to the company's performance this year.
Due to poor operation environment and the global financial crisis, the company decided to suspend the acquisition of Shandong Xiwang Food Company, a subsidiary of Shandong Xiwang Group Co., which is specialised in producing edible oil.
Xiwang Sugar is the largest crystallised glucose producer in China. It also produces corn gluten meal, corn germ and corn starch paste for animal feed.