China Kangda Food reported Tuesday its net loss for 2021 widened to CNY40.62 million from CNY36.06 million in 2020 on increased costs of animal feed and lower selling prices for raw chicken meat.
Revenue for the 12 months ended 31 December was nearly flat at CNY1.52 billion, the company said in a filing to SGX.
Chilled and frozen chicken meat revenue tumbled 25.4 percent on-year in 2021 to CNY363.44 million, mainly on proactive measures to reduce the segment’s production and sales as selling prices fluctuated significantly and fell during the year, the filing said.
Chilled and frozen rabbit meat revenue increased 33.8 percent on-year to CNY222.77 million, with the development of new customers in the domestic market contributing to the growth, the company said.
Processed food revenue grew 13.6 percent in 2021 to CNY738.22 million on new products, China Kangda Food said.
The gross profit margin fell to 4.7 percent for 2021 from 7.6 percent in 2020, the filing said.
Other income and other gains rose to CNY41.02 million from CNY23.51 million in 2020, on gains on the disposal of a subsidiary, interest income, rental income and net gains from fair value changes, the filing said. The subsidiary disposal was of Haiqing Foods, which was completed in November, the filing said.
Administrative expenses also fell to CNY64.83 million in 2021 from CNY74.88 million in 2020, while selling and distribution costs declined to CNY40.05 million in 2021 from CNY43.74 million in 2020, China Kangda Food said.
The auditors’ report cited a material uncertainty which may cast significant doubt on the company’s ability to continue as a going concern due to the 2021 net loss and the current liabilities exceeding current assets by CNY106.13 million.
China Kangda Food issued a cautious outlook.
“The food industry will continue to face challenges with low growth rate and intense competition,” the company said. “To maintain the overall profitability and to enhance the competitiveness and resistance against market risk, the group will focus on high value–added processed foods, safeguard the business relationship with the major customers and proactively explore new markets and new customers.”
China Kangda Food said it would continue to leverage on its leading position in the rabbit meat segment, in which it covers the whole industrial chain from breeding to slaughtering to processing.
“The group is confident that the demands for rabbit meat will increase steadily with further improvement of living standards and more consumers tend to prefer a wider variety of nutritious foods,” the company said.