Involvement Of "Two Oxane Incidents" Overlord Group Net Loss Of 118 Million Last Year

The overlord group announced its year-round results for the year ended December 31, 2010.

Due to the "two oxane incident", in 2010, the total revenue of the group was about 1 billion 475 million yuan (RMB), down 16% from the same period last year. Net profit loss was 118 million yuan, while its net profit in the same period in 2009 was 364 million yuan.

The main reason for the sharp decline in sales and profits in 2010 was reported by the "two oxane incident" in 2010. This incident had a negative impact on the sales performance of shampoo in the second half of the year.

After the disclosure of "two oxane incidents" in July 14, 2010, the sales performance of the overlord brand shampoo in the second half of 2010 decreased by 63.2% compared with the same period last year.

It is reported that "overlord" is the core brand of the group. The brand earned 994 million yuan last year, accounting for 67.4% of the group's total revenue, down 29.6% from 2009. Especially in the second half of 2010, the sales revenue was only 282 million yuan, down 60.4% from the same period last year.

Other brands, the "chase wind" brand income of about 333 million yuan, accounting for 22.6% of the group's total revenue, an increase of 13.9% over 2009; "overlord herbal tea" income of about 70 million yuan, accounting for 4.7% of the group's total income; "Li Tao" brand income of about 50 million yuan, accounting for 3.5% of the group's total income, an increase of 15.5% over the same period in 2009; "snow beauty" income 5 million 500 thousand yuan, accounting for 0.4% of group income.

In addition to causing losses to the main brand of the overlord group, the "two oxane incident" incident also increased the group's selling cost.

After the incident, in order to restore consumer confidence in the related products of overlord group, the cost of promotional activities was increased, coupled with the new "overlord herbal tea" launched by the group in April 2010 and the listing and promotion expenditure of the new "Li Tao" products launched in October. The distribution expenses of 2010 group increased to 942 million yuan, a substantial increase of about 47.8% compared with the same period in 2009.