China Modern Dairy Holdings Ltd. has issued a profit warning, anticipating a significant increase in loss for the current period compared to the same period in 2024. Despite measures taken to reduce costs and increase efficiency, including culling low-producing cows to improve herd structure, the Group expects a substantial loss. This loss is attributed to the re-assessment of the fair value of dairy cows, a non-cash item that will not materially affect cash flows or working capital. The company remains optimistic about the future, expecting a stable recovery in raw milk prices as demand rebounds, which should enhance profitability and sustain growth. The sales volume of raw milk is forecasted to increase by approximately 10% compared to the previous year, although the cost of sales per kilogram is expected to decrease. The announcement is based on preliminary assessments and unaudited management accounts. Investors are advised to exercise caution.
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