[ET Net News Agency, 26 March 2018] China Shengmu Organic Milk (01432) said it expects
to record a loss attributable to owners of the parent for the year ended 31 December 2017
of an amount of about Rmb1 billion as compared to the profit of about Rmb680 million for
the previous financial year.
Such expected turnaround to loss is mainly due to the Group is expecting to make a
provision of about Rmb650 million for impairment of receivables; the Group is expected to
experience a substantial loss arising from changes in fair value less costs of sales of
biological assets of Rmb600 million for the year ended 31 December 2017 as a result of the
Group controlled the numbers of its dairy cows in light of the weak demand of raw milk in
the market, and the general decline in the price of raw milk; and in 2017, facing intense
market competition of dairy products, the Group adjusted its market strategy, and both the
sales volume and sales price of self-owned brand liquid milk products decreased
substantially as compared to last year. Meanwhile, the average price of raw milk also
decreased substantially as compared to last year.
Its annual results announcement will be published by the end of March. (HL)