Giant food producer Kido Group has announced its third quarter results and those of its subsidiaries. The company said investment to expand markets for its oil and new products pushed up expenditure in the first nine months of the year by 6.1 per cent while sales of ice cream and yoghurt declined, dragging down profits by 3.2 per cent to VND1 trillion ($43.8 million).
Nine-month revenues increased by 12.5 per cent to over VND5.7 trillion (US$250 million).
In the third quarter alone, revenues and profits fell by 9.4 per cent and 15.3 per cent year-on-year to VND1.9 trillion ($83 million) and VND369 billion ($16.2 million), respectively.
Subsidiary Tuong An Agriculture Oil Joint Stock Company (TAC) earned revenues of more than VND3.2 trillion ($140 million) in the first nine months, up 4.5 per cent.
TAC focused on developing high-end products in the period. Its expenditure remained high as it kept expanding its distribution system to reach more consumers.
TAC expects high-end products to be the key driver of its growth in future. It will continue to diversify its products, including packaged ones.
Another subsidiary, Vocarimex, reported revenues of over VND3.2 trillion ($145 million) in the year-to-date, up 48 per cent. Profit after tax was VND203 billion ($8.9 million), up 0.9 per cent.
Kido Food said revenues were marginally down to VND1.1 trillion ($48 million), while profit after tax plummeted by 68 per cent to VND46 billion ($2 million).
KDC attributed the decline in revenue and profit to tough competition in what is a popular segment.
The growth in the high-end segment has helped the company cover its losses in the popular segments.
Revenues from new products under co-operation with Dabaco Foods have not been as good as expected.
The company delayed the launch of new products as it focused on improving production efficiency.
KIDO Group used to be a confectionery manufacturer, but sold its snack business and entered the food industry with products like cooking oil, ice cream, chilled products, and instant noodles.