News Milk
Dairy giant Yili reports significant revenue decline
Since the establishment of the Chinese dairy giant Yili Group in 1996, the company has been presenting impressive growth figures year after year. This era seems to be coming to an end, as evidenced by the half-year figures recently released by the company. These figures show a significant decrease in revenue.
In the first six months of this year, Yili achieved a revenue of 59.9 billion Chinese Renminbi, which is equivalent to about €7.6 billion. This represents a 9.5% decrease compared to the same period last year. With such a large decline in the first half, it is unlikely that Yili will be able to present revenue growth for the whole of 2024.
This would signify a break in the trend of results, as since its inception in the mid-1990s, the company has consistently presented impressive growth figures. Meanwhile, the Chinese dairy company has risen to the top 5 in the Global Dairy top 20 of Rabobank.
Crisis
The lower revenue this year is likely related to the crisis in the Chinese dairy industry, which is plagued by milk surpluses, although Yili itself does not mention this. This likely puts pressure on selling prices. It is not clear from the figures whether volumes have also decreased. Operating profit shows a decline of over 5% in the first six months of this year. Net profit, however, increases by just under 20% to approximately €962 million. Despite the decrease in revenue, the company maintains a generous profit margin of over 12%.
In the first half of this year, Yili sold significantly less liquid milk in terms of value. This segment represents over half of the revenue, but shrank by 13%. The ice cream division saw a 20% decrease in value sales. The powder division did see a slight increase in revenue.
