Mengniu reports profit decline despite operating gains in challenging market

China Mengniu Dairy Company Limited reported a 6.9% year-on-year decrease in revenue to RMB41.57bn for the first half of 2025, primarily due to persistent raw milk oversupply and slower consumer demand recovery. Despite this, the gross profit margin improved by 1.4 percentage points to 41.7%, contributing to an operating profit of RMB3.54bn, a 13.4% increase from the previous year. The operating profit margin also rose by 1.5 percentage points to 8.5%.

Profit attributable to owners, however, saw a 16.4% decline to RMB2.05bn. Basic earnings per share decreased to RMB0.523. This decline was partly attributed to a RMB671.7m loss from changes in the fair value of additional dairy cows, which resulted in a net loss attributable to owners of approximately RMB913.5m from associates. Net cash flow from operating activities surged by 46.2% to RMB2.81bn, largely due to lower raw milk prices reducing purchasing outflows.

Capital expenditure for the period decreased by 40.3% year-on-year to RMB1.01bn, focusing on new and upgraded production facilities. The company continued to advance its “One Core, Two Wings” strategy, emphasizing channel optimization, new business development, and operational efficiency, while maintaining its MSCI ESG Rating of “AA”.