(Yicai Global) March 29 -- Nongfu Spring reported double-digit growth in both profit and revenue last year, despite a reduced profit margin due to the fallout from the Covid-19 pandemic and the soaring price of raw materials.

Nongfu Spring posted a 18.6 percent surge in net profit in 2022 from the year before to CNY8.5 billion (USD1.2 billion) while revenue jumped 12 percent to CNY33.2 billion (USD4.8 billion), according to the Hangzhou-based firm’s latest financial report. However, both expanded at a slower clip than in 2021.

Revenue from its main product, bottled drinking water, climbed 7 percent to CNY18.3 billion, accounting for 55 percent of total revenue. While that from tea beverages soared 51 percent to CNY6.9 billion, making up 21 percent of revenue and that from fruit juice climbed 10 percent to CNY2.9 billion yuan.

However, revenue from other beverages such as soda drinks, carbonated flavored drinks and coffee plunged 23 percent to CNY1.4 billion.

The cost of polyethylene terephthalate, an important chemical used in packaging, has shot up due to the surge in international crude oil prices, driving up Nongfu Spring’s expenses and pushing down the gross profit margin to 57.4 percent from 59.5 percent.

Nongfu Spring hiked the price of its 19-liter water containers by CNY2 (USD0.30) to CNY22 (USD3.20) per barrel in February, citing the higher costs of manpower, transportation and materials.

The consumer market is expected to recover now that pandemic prevention measures have been lifted, it said. However the company did not give its outlook for the year.

Nongfu Spring’s share price [HKG:9633] edged up 0.9 percent today to close at HKD46.30 (USD5.90).

Editor: Kim Taylor