Hong Kong-listed China Huiyuan Juice Group Ltd said its 2012 net profits declined 94.7 percent to 16.1 million yuan ($2.57 million).

The company said that in 2012, it recorded net financial costs of 205 million yuan compared to a net financial income of 343.4 million yuan in 2011, as a result of changes in the fair value of convertible bonds.

Huiyuan's gross profits increased 15.6 percent year-on-year to 1.1 billion yuan in 2012. The company said the increase was due to a higher sales volume, particularly for 100 percent juice products, favorable changes in its product mix and a drop in material prices.

Sales of 100 percent fruit juices products increased 18 percent to 1.1 billion yuan and now account for 27.8 percent of Huiyuan's total sales.

On March 15, the company said that it's in talks regarding a possible acquisition of a juice concentrates and fruit purees business. At the time of the announcement, negotiations were ongoing. Industry experts believe that Huiyuan is seeking growth opportunities in China.

Media reports said that the market demand for low juice-concentrate beverages, which have less than 24 percent of juice, have better profitability in China with annual market demand at about 92 billion yuan. However, Huiyuan's market share is not significant in this sector.

According to Nielsen, the company had a 54.2 percent and 44.1 percent market share in China by sales volume in terms of 100 percent juice and nectars in 2012.

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