March 6 (Bloomberg) -- Want Want China Holdings Ltd., China’s largest maker of rice cakes, posted a 17 percent increase in 2011 profit, beating analyst estimates, as the growing economy boosted demand for its snacks and drinks.
Net income rose to $419.5 million, or 3.17 cents per share, from $358.4 million, or 2.71 cents, a year earlier, the company said in a statement to Hong Kong’s stock exchange today. That compares with the $386.8 million average of 10 analyst estimates compiled by Bloomberg. Sales rose 31 percent to $2.95 billion.
Want Want, controlled by Taiwanese billionaire Tsai Eng-meng, said gross profit margin declined by 2.8 percentage points to 34.8 percent because of higher labor costs and “substantial” increase in the price of most of the ingredients it used such as sugar, palm oil, starch, milk powder, rice and plastic packaging materials. The margin for rice crackers fell to 37.6 percent from 40.8 percent.
Want Want, which was added to Hong Kong’s Hang Seng Index in November, rose 4 percent to HK$7.82 today, the highest close since Dec. 29 2011. The stock has gained 0.9 percent this year, compared with the 12.9 percent advance in the benchmark index.
Revenue from rice crackers climbed 30 percent from a year earlier to $817 million in 2011. Sales of dairy products and beverages increased 31 percent from a year earlier to $1.4 billion while that of snack foods rose 36 percent, the company said in the statement.
The company said today it re-appointed Chu Chi-Wen as chief financial officer after he resigned from the position in July last year.
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