Business / Corporate Reports

China Resources Enterprise's Q1 profit slides 31%

(Agencies) Updated: 2014-05-26 15:23

Retail conglomerate China Resources Enterprise (CRE) said on Monday its first-quarter net profit fell 30.5 percent, hit by competition from e-commerce and a softer Chinese economy.

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CRE, which has interests that span beverage making to supermarket chains, said its retail division recorded a 0.4 percent drop in same-store sales during the quarter as more consumers shopped online.

Profit from retail operations fell 10.3 percent to HK$471 million ($61 million) during the quarter despite an 8.3 percent increase in revenue to HK$28.1 billion.

Its food division fell into the red with a HK$50 million loss compared with a HK$57 million profit a year earlier.

"Looking ahead, the retail division will continue to adopt hypermarkets as its main retail format and to expand its multi-format store network in regions where the group has already established a presence," chairman Chen Lang said in a statement.

"The division will continue to speed up its expansion into third-to-fourth tier cities, as well as into counties, towns and villages," Chen added.

CRE, which has a market value of $7.2 billion, said its profit fell to HK$356 million ($45.9 million) for the January-March quarter, down from HK$512 million profit a year earlier. That compared to a net loss of HK$30 million for the fourth quarter Of 2013.

Turnover for the quarter rose 15.7 percent to HK$41.8 billion from HK$36.15 billion the same quarter last year.

Last October, CRE announced a tie-up with the world's No 3 retailer, Tesco, posing a challenge to hypermarket leader Sun Art Retail Group Ltd.

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