Vitasoy Maintained a Sustainable Growth in 1H FY2017/2018

HONG KONG, Nov. 28, 2017 /PRNewswire/ -- Vitasoy International Holdings Limited (SEHK Code: 00345) today reported a sustainable growth for its interim results ended 30^th September 2017 ("FY2017/2018 interim"), with all operating entities registered positive sales increase.

In the FY2017/2018 interim, Vitasoy recorded an increase of 21% in revenue to HK$3,646 million, while profit attributable to equity shareholders of the company registered a decrease of 14% to HK$397 million. The drop in net profit was mainly resulted from a higher base in the previous year caused by a non-recurring gain from the divestiture of the North American Mainstream and SAN SUI business (the "North American divestiture").  

Excluding the impact of the North American divestiture, the company reported 23% growth in revenue and 12% increase in profit attributable to equity shareholders. The increment in profit attributable to shareholders was attributed by the increased gross profit, enhanced operational efficiency, partially offset by rise in operating expense.

Driven by strong sales performance, the gross profit increased 19% to HK$1,922 million. The gross profit margin maintained at 53%.

Basic earnings per ordinary share were HK37.7 cents, dropped by 14%. The Board of Directors recommends an interim dividend of HK3.8 cents per ordinary share (FY2016/2017 interim dividend: HK3.8 cents per ordinary share).

Mr. Winston Yau-lai Lo, Executive Chairman of Vitasoy, said, "Mainland China was the key growth driver for the interim performance, complemented by a moderate sales increase in Hong Kong and a steady growth in Australia and Singapore. The joint venture in the Philippines between Vitasoy and Universal Robina Corporation has started its operation smoothly with initial shipments to local customers."

During the interim period, Vitasoy China continued its "Go Deep Go Wide" strategy and delivered a robust growth of 39% in revenue. An encouraging growth was reported in both established and new markets with enhanced market presence for VITASOY and VITA brands.

Vitasoy Hong Kong recorded a revenue decrease of 2% as the revenue from the North American divestiture was included in the previous interim period. Excluding this, the operation recorded 3% sales growth after re-clustering the post-divestiture imported beverage business of North America under its segment.

The Australia/New Zealand business reported 6% growth in revenue and maintained its leading position in the local plant milk market through product innovation like VITASOY Almond Milk. Vitasoy Singapore's business grew 6% in overall revenue as imported beverages registered strong growth.

The joint venture business in the Philippines has started to market Vitasoy products and launch communications programmes to increase brand awareness and product trials.

"For the second half of FY2017/2018, we expect to maintain a sustainable growth albeit at a more moderate level. While Mainland China will continue to scale up, we will invest in other markets to strengthen brand equities and execution as it is critical to secure our sustainable growth in the future," said Mr. Lo.

About Vitasoy

Vitasoy International Holdings Limited is a leading manufacturer and distributor of plant-based food and beverages. Established in 1940 by Dr. Kwee-seong Lo in Hong Kong, the company strives to promote sustainable nutrition through provision of a variety of high-quality products with Nutrition, Taste and Sustainability as the guidelines for its portfolio offerings. Vitasoy integrates social responsibility into its business and contributes to the communities that the company serves. Currently, Vitasoy has manufacturing operations in Hong Kong, Mainland China, Australia and Singapore. Its products are available in about 40 markets worldwide. Vitasoy is listed on the main board of the Hong Kong Stock Exchange (00345.HK). Vitasoy website: www.vitasoy.com

Summary

Financial Highlights

Business Review

Mainland China - "Go Deep Go Wide" strategy keeps delivering sustainable growth

Vitasoy China achieved a strong growth of 39% in revenue to HK$2,252 million and 41% in operating profit to HK$398 million.

The growth was broad based across traditional strongholds like Southern China and also new markets where the company has been expanding. During the interim period, Vitasoy achieved a consistent performance in the retail segments, including accelerated development in e-commerce channels.

While VITASOY remains the core focus, the VITA brand has achieved an encouraging response behind its summer activation.

After the first full year of smooth operation of its new Wuhan plant, Vitasoy planned to relocate the Shenzhen Production Plant to a larger and more efficient new factory in Changping Town, Dongguan City, Guangdong Province to ensure an adequate production capacity for the company's future expansion. The new facility is expected to commence in 2021.

Looking ahead, Vitasoy China will continue to be the key driver for the company's growth. It will continue the "Go Deep Go Wide" strategy, staying focused on improving the execution of its equities and in-store fundamentals.

Hong Kong, Macau and Exports - Investing for future growth

Driven by growth in core business, Vitasoy Hong Kong recorded a steady sales increase. Revenue decreased by 2% to HK$1,094 million as the revenue from the North American divestiture business was included in the previous interim period. The operating profit dropped 3% to HK$184 million due to an increased investment in brand equity. Excluding the North American divestiture, Vitasoy Hong Kong registered 3% growth in revenue and 4% drop in operating profit.

The business growth of Vitasoy Hong Kong was mainly driven by its innovation. During the first half of FY2017/2018, the company launched a new plant milk product range under VITASOY CALCI-PLUS, including Hi-Calcium Almond Milk and Hi-Calcium Coconut Milk and the upgraded Plant Sterol Soya Milk, which fulfilled ever-increasing consumers' interest in premium, healthy and sustainable products.

Vitasoy Hong Kong also increased its investment in sales and marketing activities, expanded in-store presence and drove consumer penetration and trials.

Vitasoy Hong Kong will increase its focus on the core equities of VITASOY and VITA and leverage the successful innovation to enhance its brands to be featured in more consumption occasions and channels. The operation will continue to increase investment in marketing and promotions, as well as in improving manufacturing and logistical infrastructure.

Australia and New Zealand - Maintaining market leadership position in plant milk segment

The Australia and New Zealand operation continued to maintain its number 1 leadership position in plant milk market and recorded steady sales increase of 6% to HK$251 million. Operating profit dropped by 2% to HK$49 million behind increased investments in brand building to drive business growth.

As consumers in local markets have become more health conscious and appreciate the benefits of plant milk, Vitasoy expects solid growth in the category to continue during the second half of the fiscal year. The operation will focus on both core Soy as well as Almond and other plant milk products which will help gain a stronger market share.

Singapore - Improving sales of VITASOY tofu and imported beverages

Vitasoy Singapore delivered a 6% increase in revenue to HK$50 million, while the operating profit decreased by 17% to HK$4 million, mainly due to an increased investment behind the VITASOY tofu and imported beverages.

Despite the tofu market has become more competitive, Vitasoy Singapore maintained its market leadership.

Looking ahead, the company expects to maintain its market leadership position by introducing innovative products in both tofu and imported beverages to continue scaling up this operation.

The Philippines - Smooth collaboration with local JV partner

In the second half of FY2017/2018, Vitasoy's joint venture business in the Philippines will continue its communications programme and foster a strong collaboration with the JV partner, Universal Robina Corporation, to expand Vitasoy's presence, with an aim to bring nutritious and tasty plant milk products to more communities in the Philippines.