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Chinese dairy giant Yili reports sharp drop in sales
Since the Chinese dairy giant Yili Group was founded in 1996, the company has presented impressive growth figures year after year. This era now seems to be coming to an end, as can be seen from the half-year figures that the company recently announced. They show a significant drop in turnover.
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In the first six months of this year, Yili achieved a turnover of 59,9 billion Chinese Renminbi, which is equivalent to around €7,6 billion. This is 9,5% lower than the same period last year. With such a large decline in the first half, it is unlikely that Yili will be able to present a turnover growth for the whole of 2024.
This would mean a trend break in the results, because since its inception in the mid-90s the company has always managed to present impressive growth figures. In the meantime, the Chinese dairy company has climbed to the top 5 of the Global Dairy top 20 of Rabobank.
Crisis
The lower turnover this year is probably related to of crisis in the Chinese dairy industry, which is plagued by milk surpluses, although Yili does not even report this. This probably puts pressure on sales prices. Whether volumes have also shrunk, cannot be determined from the figures. The operating profit shows a decline of more than 5% in the first six months of this year. The bottom line is an increase of almost 20% to the equivalent of €962 million. Despite the decline in turnover, the company has a generous profit margin of more than 12%.
Yili sold significantly less liquid milk in the first half of this year, in terms of value. This branch represents more than half of the turnover, but shrank by 13%. The ice cream division even sold 20% less in terms of value. The powder division did see a slight increase in turnover.