A series of food-safety-related scandals in the second half of 2011 took the shine off profits at China Yurun Food, which said full-year net profit fell 34 per cent to HK$1.8 billion last year, from HK$2.73 billion in 2010.
The fall in profit came despite a 50.5 per cent rise in turnover last year to HK$32.3 billion, and Yurun, the mainland's second-largest meat processor, said its gross profit margin narrowed to 8.6 per cent during the year, from 14.4 per cent in 2010.
'We saw the worst operational situation in the fourth quarter and I think we can see the light at the end of the tunnel,' chairman Zhu Yicai said.
He said hog procurement costs reached a historic high in the fourth quarter, at about 19 yuan (HK$23) per kg, which fell to an average of 17.2 yuan in the first two months of this year.
Yurun faced a crisis last year with several food-safety issues involving bacteria exceeding government standards and illegal additives.
It blamed the fall in its gross profit margin on a significant rise in hog prices and other raw-material costs, and on a fall in consumer confidence in its products.
Hog prices rose 48.7 per cent last year, reaching an average of 15.88 yuan per kg.
