China Dairy Group says net profit for the 3 months ended 31 March 2010 fell 66% to $1.1 million owing to the increasing prices of key raw materials.

For the 3 months ended 31 March 2010, the group achieved total sales of $95.2 million, representing a 6.1% or $5.5 million increase over the corresponding period in 2009.

Sales of liquid milk grew by 7.7% from $60.9 million in the corresponding period to $65.6 million mainly driven by increase in both volume and Average Selling Price (ASP).

Sales of milk powder posted growth of 1.6% from $27.4 million in the corresponding period to $27.8 million mainly driven by product mix improvement.

China Milk anticipates competition to remain intense and will continue to invest in product quality, product innovation, branding and its distribution network in FY2010.