China Mengniu Dairy experienced a decrease in profits in the first half of the year due to lower demand, resulting in a 6.9% fall in revenues to 41.57bn yuan. The company saw a 16.2% drop in profits to 2.05bn yuan, following a decline in sales and profits in 2024.

The company attributed its performance to an oversupply of raw milk and slow recovery in consumer demand, causing an imbalance in China’s dairy industry. Despite challenges, Mengniu remains optimistic about the sector’s long-term potential, citing government support measures and investing in innovation and distribution.

Mengniu’s milk-formula division reported a 2.5% increase in revenue to 1.68bn yuan, while its liquid milk division, which accounts for the majority of turnover, saw sales decline by 11.2% to 32.19bn yuan. The company’s revenue fell by 10.1% in 2024 to 88.67bn yuan, with a significant drop in profits attributed to impairment losses from a past acquisition.

Overall, Mengniu’s profits slid in the first half of the year, impacted by lower demand and oversupply issues in China’s dairy industry. Despite challenges, the company remains focused on growth opportunities in lower-tier markets and high-growth channels, emphasizing innovation and distribution to drive future success.

Read more at Yahoo Finance: Mengniu Dairy H1 profits slide as revenues curdle