Wahaha Gained Less Profit Last Year

Wahaha, the biggest food and beverage company in China, gained 6.7 billion RMB in net profit in 2010. Such a performance was released by Zong Qinghou, president of Wahaha, in an interview by Beijing media. Despite great increase in its total revenue, his company gained 2 billion less profit than that in 2009, a result that was caused by rising costs.

Wahaha s operating revenue was 43.2 billion RMB in 2009 and its net profit was 8.7 billion. Though it took in more than 55 billion RMB in sales in 2010, its net profit just reached 6.7 billion RMB.

Mr. Zong said, Raw material costs, including those of sugar, milk powder and packaging, soared last year, which made my group lose 5 billion in net profit. Therefore, we have increase in sales and decrease in profit.

As for his targets in 2011, Mr. Zong expected that sales revenue could reach 70 billion RMB and net profit 8 to 10 billion. However, he lowered his expectation of net profit to over 7 billion RMB considering the rising costs.