Bright Dairy and Food (600597) recorded a 22.36 percent year-on-year rise in 2011 net profits to 238 million yuan, reports Oriental Morning Post, citing a company filing.

Sales revenues in 2011 grew 23.16 percent from 2010 to 11.79 billion yuan, surpassing 10 billion yuan for the first time.

However, operating profits of the dairy maker fell 4.04 percent from 2010 to 200 million yuan.

Bright Dairy said the company continues to deal with the fallout from the melamine scandal in 2008, while also facing slowing growth and rising cost pressures in 2012.

The company's dairy production business had operating expenses of 7.28 billion yuan in 2011, up 25.47 percent from a year earlier, which brought down operating profit margin by 1.12 percentage points.

In March, Bright Dairy raised the price of 35 out of 40 types of products by an average of three percent due to rising production costs.

Analysts have also attributed the price hike to high advertising and sales costs, according to the report, and Bright has been criticized for high administrative costs.

Net cash flow was down 83.26 percent from 2010. Bright Dairy has spent 382 million yuan on acquisitions and took on 200 million yuan in bank loans for its New Zealand subsidiary, resulted in capital pressures for the company.

China sales outside of Shanghai grew four percent, while overseas sales surged 445 percent from 2010 to 1.64 billion yuan. In 2012, the firm's sales revenue target is 13.65 billion yuan with a return on net asset of not less than eight percent.

Source:capitalvue.com