Vitasoy Recorded Steady Growth in FY2018/2019 with Revenue Increase in All Operating Entities

HONG KONG, June 20, 2019 /PRNewswire/ -- Vitasoy International Holdings Limited (SEHK Code: 00345) today reported a steady growth for its annual results ended 31^st March 2019 ("FY2018/2019"), thanks to strong fundamentals and operating efficiency improvements in its Mainland China business.

In FY2018/2019, Vitasoy's revenue grew by 16% to HK$7,526 million. Profit attributable to equity shareholders achieved HK$696 million at 19% of growth. Excluding the foreign currency impact, revenue and profit attributable to shareholders increased further by 18% and 20% respectively.

As a result of improvements in manufacturing efficiency driven by high volume and a trend in favourable commodity prices, especially sugar and paper packaging, gross profit margin slightly increased to 54%. This contributed an increase of 18% in gross profit which amounted to HK$4,042 million in FY2018/2019. 

The Board of Directors recommends a final dividend of HK38 cents per ordinary share. (FY2017/2018: final dividend of HK31.4 cents per ordinary). Together with the interim dividend of HK3.8 cents per ordinary share (FY2017/2018: an interim dividend of HK3.8 cents per ordinary share), the total dividend for FY2018/2019 will be HK41.8 cents per ordinary share (FY2017/2018 total dividend: HK35.2 cents per ordinary share).

Mr. Winston Yau-lai Lo, Executive Chairman of Vitasoy, said at a press conference today, "The growth in FY2018/2019 has been, as expected, strong yet relatively moderate in the second half of the fiscal year. Despite an increasingly challenging and uncertain international economy, Vitasoy continued to sustain a healthy financial position and strong business growth. Mainland China continuously served as a growth engine, while Australia and New Zealand received a good revenue growth. Hong Kong and Singapore saw solid performance reaffirming our market leadership, while our brand awareness in the Philippines has increased."

Mainland China delivered 25% and 33% growth in revenue and profit from operations respectively with broad-based growth across portfolio, channels and geographies. Profit growth outpaced revenue mainly due to favourable business mix and high capacity utilisation.

Maintaining its dominant role in the market, Hong Kong sales grew by 5%, with a minor decline in profit due to multiple-year investment programs in production and logistics infrastructure. The low/no sugar portfolio saw a strong sales momentum during the period. 

Australia and New Zealand achieved revenue growth of 4% in the reporting currency and a double-digit growth in the Australian Dollars. Singapore continued growing its share in beverage sector and maintaining its leading position in tofu category with a 7% increase in overall revenue.

The construction of the new production plant in Dongguan (Guangdong, China) has commenced. The company also continued the multiple-year upgrade program in Hong Kong and the yearly upgrade of manufacturing equipment in factories to secure continuous growth and capacity, in order to build long term fundamentals.

During the year, the company focused on pursuing sustainable growth in its product portfolio, harnessing resources and managing environmental impact in all markets. Vitasoy has reset its sustainability goals as majority of key targets for FY2020/2021 have already been achieved. The information will be detailed in this year's Sustainability Report to be released in July.

Looking ahead, Mr. Lo said, "Given the expected entries into our categories, we are stepping up our investments in brand equity building, organisational capability and infrastructure to secure the foundations for long-term growth.

With the changing market landscape and higher demands of customers, the company anticipates a more challenging and competitive environment ahead. Vitasoy will continue to scale up business and expand market share without compromising on our commitment to nutrition, taste and sustainability for the development of business, environment and society."

About Vitasoy
Vitasoy International Holdings Limited is a leading manufacturer and distributor of plant-based food and beverages. Established in 1940 by the late 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 cares about the social responsibility 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) and included as a constituent of MSCI Hong Kong Index, Hang Seng Stock Connect Hong Kong Index and Hang Seng Stock Connect Hong Kong Big Bay Area Index and Hang Seng Corporate Sustainability Benchmark Index, among others.

Vitasoy website: www.vitasoy.com

Summary

Financial Highlights

Business Review

Mainland China –
Consistent strategy and disciplined execution deliver strong growth

Vitasoy China achieved another year of strong growth in FY2018/2019. The company recorded 25% increase in revenue to HK$4,628 million and 33% growth in profit from operations to HK$720 million comparing with a high base last year. The strong performance was a result of favourable raw material prices and increased growth in established markets supported by high production capacity utilisation. The depreciation of the RMB, however, has lowered the growth in the market when reporting in Hong Kong dollar term.

To enhance its brand awareness and equity credentials as expanding, the company has increased investment in advertising on both VITASOY and VITA brands in view of the increasingly competitive market to secure long-term success.

The company has also gradually expanding the business across Mainland China by increasing presence and acceleration from e-commerce.

Looking forward, Mainland China will continue to grow ahead of the market, leveraging execution, expansion and innovation on both brands VITASOY and VITA. More investments to secure brand equity building, infrastructure readiness and innovation for the future are expected.

Hong Kong, Macau and Exports –
Increased investment to prepare for new phase of growth

In Hong Kong, Vitasoy delivered a strong revenue growth of 5% despite the very mature development of its brands. Both brands VITASOY and VITA grew in revenue, together with health focused innovation, particularly the low/no sugar product ranges under both VITASOY and VITA.

Profit from operations decreased by 4% because of the announced programme of infrastructure upgrade and new organisational capabilities.

Vitasoy Hong Kong will continue to drive solid growth of its core and additional acceleration in innovation. The company believes that the multiple-year infrastructure investment program will prepare Hong Kong for its next phase of profitable growth.

Australia and New Zealand –
Accelerated business growth and penetration

The company's Australian and New Zealand business grew by 10% in revenue with profit from operation at 4% in Australian dollars but contracted in reporting dollar due to the local currency depreciation. The business momentum was mainly driven by increased penetration of core offering, as well as new products launch and stronger on-premise performance.

In the future, the company expects continued growth in this market primarily obtained through innovation and execution, as consumers express increasing interest in health-conscious choices.

Singapore –
Emerging import beverage business

Vitasoy Singapore recorded a 7% increase in revenue. The company registered double-digit growth in imported beverage business when comparing to the previous year, while maintaining its market leadership in tofu business.

The operating profit declined significantly due to a substantial investment in brand equity and organisational capabilities which is consistent with our strategy to scale up the operation in the region.

In the year ahead, the company will continue its strategy of leading the tofu market whilst driving more investments in beverages to accelerate the scaling up of the operation.

The Philippines –
Awareness further increased

The joint venture with Universal Robina Corporation in the Philippines continues to gradually increase the awareness and trial of VITASOY products for the long-term development of Vitasoy's portfolio.

The business is expected to continue its gradual and moderate growth, developing the understanding about plant-based nutrition in the market, and capitalising on the vast distribution network of the local joint venture partner.