KFC operator Yum China beats earning expectations

Yum China, the operator of fast-food giants KFC, Pizza Hut and Taco Bell in the country, beat earnings expectations in its first report since spinning off from its US parent.

The firm said operating profit for 2016 hit $640 billion in China, up 31 percent from 2015 when it was a unit of Yum Brands.

The growth came as Yum added 575 new restaurants over the year -- with more than half coming in the final three months -- bringing its total in the country to more than 7,500.

“We believe the majority of our restaurants in China are yet to be built,” CEO Micky Pant said in a statement posted with the results on Tuesday. “Right now, our top priority is consistently delivering positive same-store sales growth.”

Same-store sales expanded three percent at KFC but Pizza Hut's performance fell seven percent, it added.

Nevertheless "this was a momentous year for Yum China," Pant said, adding that the new independent firm has enhanced its leading position in the Chinese market.

After three decades in the country, Yum Brands in October split its $6.9 billion operations as the fast-food industry faces sluggish sales growth with consumers increasingly turning to upmarket dining options.

The company's China business was also hammered by a tainted meat scandal in mid-2014.

Three months after the spin-off move, Yum China opened China's first Taco Bell, in Shanghai with a menu adapted to local tastes.