China Angel Food, the manufacturer and distributor of confectionery and other food products in Guangdong province, has reported a net loss of RMB3.22 million ($647,000) for the first quarter of 2010 (1Q FY10) compared to a net profit of RMB304,000 a year ago.

In 1Q, the group achieved sales of RMB 30.8 million, representing a decrease of RMB 4.8 million or 13.4% decline over the same period ended 31 March 2009 (1Q FY09).

Snacks and other food products did not perform well for the period ended 1Q FY10, and had suffered a decline of RMB 5.8 million or 21.3%, from RMB 27 million in 1Q FY09, to RMB 21.3 million in 1Q FY10. Sales of its snacks like the Angel cookies range of products during the Chinese Lunar New Year period were weak. This was largely due to slower sales at its retail chain stores likeCarrefour and Wal-Mart as well as distribution points.

Although China enjoyed a growth rate of 8.7% in 2009, there are concerns that inflation may arise with the healthy economy. With that in mind, China Angel Food says it is cautiously optimistic about the coming months and will be closely monitoring the business environment and will implement measures to cope with the any potential increase in prices of raw materials which may erode margins.