China Resources Enterprise, a consumer-focused conglomerate, reported a 34.74 per cent fall in net profit for the first quarter, hit by the slowing economy and deflation in the country.
The decline, although in line with analysts' expectations, sent its stock slipping as much as 4.42 per cent yesterday before closing down 2.46 per cent at HK$15.86.
The company, which operates supermarkets and produces Snow beer with SABMiller, said net profit for the three months to March was HK$417 million, down from HK$639 million a year earlier.
Underlying net profit, which excluded the after-tax effect of revaluation of investment properties and major disposals of non-core assets and investments, decreased 29 per cent. Turnover grew 8 per cent to HK$17.17 billion from HK$15.87 billion.
Except for the beverage business unit, which turned a profit of HK$17 million after losing HK$19 million a year earlier, China Resources' other four major business units - retail, food processing and distribution, textile as well as investment property - saw drops in profit or even losses.
'The global financial crisis has affected our businesses in different regions to various extents, leading to mixed performances among different divisions in the first quarter,' said managing director Chen Lang.
Retail, the largest contributor that accounted for 59.64 per cent of overall net profit, fell 13.43 per cent to HK$232 million. Same-store sales at its more than 2,600 supermarket stores in Hong Kong and on the mainland fell 3.6 per cent.
