China: China Resources Enterprise, Limited announced on April 8 its annual results for the year ended 31 December, 2004. Consolidated turnover reached a record HK$47.1 billion and profit attributable to shareholders was HK$1.603 billion, representing an increase of 36% and 10% respectively from last year. Earnings per share rose by 9% to HK76.2¢. The Board of Directors recommended a final dividend of HK16¢ per share. Together with the interim dividend of HK11¢ per share, the full year cash dividend will be HK27¢ per share, a 13% increase from 2003 with payout ratio reaching 36%.

Most of the Group’s businesses showed encouraging operational improvements. In particular, the retail business turned around and contributed HK$83 million earnings, compared with a loss of HK$99 million last year. All the three retail operations, including supermarket, retail stores in Hong Kong and brand fashion distribution, improved and were profitable. The supermarket operation contributed HK$24 million earnings, in sharp contrast to the HK$107 million loss of last year, and EBITDA amounted to HK$402 million, up 3.1 times. Enhanced supplier rebate, lower operational expenses, higher profit contributions from Suguo and Hong Kong operations all accounted for the successful turnaround of the supermarket operation.

The Group’s beverage business saw a respectable profit growth of 15% to HK$113 million, which was attributable to strong sales volume growth, especially from the premium beer segment, and the initial contributions from the newly acquired Qianjiang and Longjin breweries. Beer sales volume increased by 24% to 3.13 million kilolitres, of which organic growth was 11%. Average selling price increased by 3.4% and gross margin was relatively stable despite the increase in raw material costs.

The food processing and distribution business reported a 17% increase in earnings. Enhanced awareness in food hygiene and active promotion of ‘Ng Fung’ fresh meat led to a 17% turnover growth of food stuff distribution and a 3% increase in operating profit. The abattoir operation continued to register profit growth with higher sales volume of livestock.

China Resources Enterprise, Limited is listed on the Hong Kong Stock Exchange and is also traded on SEAQ International of the London Stock Exchange. It is also one of the constituent stocks of the Hang Seng Index in Hong Kong and Hang Seng London Reference Index. The Group has a well-diversified portfolio of businesses in both Hong Kong and the Chinese Mainland, with principal activities being retail, beverage, food processing and distribution, textile and petroleum distribution.

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