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UPDATE 1-Tingyi profit slumps to 10-yr low, sees challenging year ahead
March 27, 2017 / 6:39 AM / 8 months ago

UPDATE 1-Tingyi profit slumps to 10-yr low, sees challenging year ahead

* Q4 revenue slides 0.7 pct, net loss narrows to $36 mln

* 2016 gross margin falls 0.56 percentage points at 31.3 pct

* Stocks ease 0.5 pct after results (Add details, management comment)

HONG KONG, March 27 (Reuters) - Chinese instant noodle maker Tingyi (Cayman Islands) Holding Corp said on Monday annual profit plunged 31 percent, hit by higher raw materials costs and a consumer shift towards healthier food and drinks.

Tingyi, owner of the Master Kong brand of food and the Chinese partner of Starbucks Corp in ready-to-drink coffee and PepsiCo Inc in fruit juice, also said it expects the year ahead to be challenging.

“Looking ahead in 2017, the packaged food industry is currently facing challenges in the macroeconomic environment, including the slowdown in economic growth and rising raw material costs,” Chairman Wei Ing-Chou said in a statement to the Hong Kong stock exchange.

Tingyi said net profit came in at $176.9 million in the January-December period, its lowest yearly profit since 2006. The result lagged an average forecast of $190 million from 24 analysts polled Thomson Reuters I/B/E/S.

Revenue fell 8 percent to $8.4 billion.

For the fourth quarter of 2016, Tingyi’s revenue slid 0.7 percent to $1.46 billion while losses attributable to owners of the company narrowed to $36 million against $86 million the same period a year ago, it said.

Bigger rival Want Want China Holdings Ltd earlier this month posted a 4 percent rise in yearly profit.

Tingyi said beverages made up 58 percent of its 2016 revenue, followed by noodles at 39 percent.

The market share of its Master Kong instant noodles in terms of sales and sales volume was 42.9 percent and 51.1 percent respectively, it cited data from AC Nielsen as saying.

Shares of Tingyi were down 0.5 percent after the results were announced. That compares with a 0.4 percent fall in the benchmark Index. (Reporting by Donny Kwok; Editing by Edwina Gibbs and Stephen Coates)

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