August 20, 2019 / 10:37 AM / 3 months ago

China's Wens H1 net profit climbs 50.8% on strong poultry sales

BEIJING, Aug 20 (Reuters) - China’s top pig and poultry farmer Wens Foodstuff Group Co Ltd said on Tuesday its first-half net profit jumped 50.8% as surging poultry demand more than made up for a loss in its hog business after disease hit the country’s pig production.

The company, worth about $30 billion by market value, reported net profit for the first six months of the year was 1.38 billion yuan ($195.4 million), up from 917.3 million yuan a year earlier. Revenue rose 20.2% to 30.4 billion yuan from the same period in 2018.

The results come after deadly African swine fever ravaged China’s hog herd, reducing pork supplies and pushing up demand for substitute proteins like chicken and duck.

Wens, which raises native Chinese chicken breeds and ducks, as well as geese and pigeons, said sales volumes of its broiler chickens jumped 17.5% in the first half, while duck sales increased by 21.5%.

Poultry sales boosted profits, even as prices came under pressure from rising supply to counter the loss in pig production across the country, Wens said in a statement in July.

Chinese duck production is expected to grow significantly this year in response to African swine fever.

The company has also targeted an expansion in broiler output of at least 10% this year. Wens said in June it would buy Jiangsu Jinghai Poultry Industry Group, marking its first step into the white-feathered broiler bird segment.

Wens said its hog business recorded a loss, however, despite sales volumes being up 13.7% on a year ago.

Hog prices were weak in most of the first quarter, and Wens also raised its spending on biosecurity measures to protect against the disease.

Wens shares closed at 39.46 yuan per share on Tuesday before the results were released.

$1 = 7.0621 yuan Reporting by Dominique Patton; Editing by Tom Hogue

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