HONG KONG, May 22 (Reuters) - Chinese instant noodle maker Tingyi (Cayman Islands) Holding Corp reported its best quarterly performance in nearly three years on Monday helped by healthy sales of its mainstay products.
Tingyi, the Chinese partner of Starbucks Corp for ready-to-drink coffee and PepsiCo Inc for fruit juice, said attributable profit for the three months to the end of March rose 15.3 percent to 433.5 million yuan ($63 million) from 375.9 million yuan a year earlier.
The last time the company registered a year-on-year increase in quarterly profit was for the three months to the end of June 2014, according to Eikon data based on company figures.
Revenue rose 3.7 percent to 14.2 billion yuan in the first quarter, though the company fared better in controlling distribution and administrative costs than a year earlier, Tingyi said in a filing to the Hong Kong bourse.
The company’s gross profit margin dropped 3.37 percentage points from a year earlier to 28.04 percent due to the rising cost of raw materials such as sugar, Tingyi said.
“Due to the impact of rising raw material costs, the gross profit of the group will remain under pressure in the short term,” Chairman Wei Ing-Chou said in the filing.
The owner of the Master Kong brand, which last year reported a 31 percent drop in profit, has previously said it expected 2017 to be challenging because of slowing economic growth and rising raw material costs.
While official economic data suggests a rosier 2017 in China, the bottom lines of the country’s top consumer firms - from brewers to noodle makers and cinema chains - paint a patchy picture of spending.
Tingyi shares have climbed about 3 percent so far this year, lagging a 12 percent gain in the benchmark index. ($1 = 6.8850 Chinese yuan renminbi) (Reporting by Donny Kwok and Lee Chyen Yee; editing by Himani Sarkar and David Clarke)