Zhongpin, a China-based meat and food processing company, has reported a 31% decrease in net income to $44.1m for the full-year 2012, compared to $64.2m in 2011, due to a lower gross profit margin, rising labor and utility costs, and higher interest expenses, among others.
The company posted 13% increase in net revenues to $1.6bn, compared to $1.4bn in the previous year, primarily due to higher sales volume for pork and pork products sold at lower average selling prices.
Zhongpin stated that the costs continued to rise, mainly due to the company's current operations and planned expansions.
Zhongpin chairman and chief executive officer Xianfu Zhu said, "We are managing our costs to maintain as much gross and net profit margin as possible and are aggressively working to further increase our asset utilization, effectiveness, and efficiency."
For the fiscal 2013, the company expects the demand for pork in China to remain strong and its revenues from pork and pork products to increase based on higher tonnage sold at lower average prices. The company has noted that the live hog prices are expected to remain at current levels as in 2012.
As of 1 March 2013, Zhongpin had an annual capacity of 683,760 tons for chilled and frozen pork, 176,000 tons for prepared pork products, 20,000 tons for pork oil, and 30,000 tons for vegetables and fruits, for a combined total of 909,760 tons.
Zhongpin specializes in pork and pork products, vegetables, and fruits in China. Its distribution network in China included 3,490 retail outlets as of the end of last year. The company's export markets include Europe, Hong Kong, and other countries in Asia.