Vitasoy Sustained Strong Growth Momentum in 1H FY2018/2019

HONG KONG, Nov. 21, 2018 /PRNewswire/ -- Vitasoy International Holdings Limited (SEHK Code: 00345) today announced its interim results ended 30^th September 2018 showing a broad-based sales growth across its operating markets.

In the first six months of the Fiscal Year 2018/2019, the company achieved year-on-year growth of 22% in revenue and 30% in profit attributable to equity shareholders. Gross profit increased by 25% to HK$2,408 million, driven by higher sales. Vitasoy's gross profit margin improved to 54%, showing greater manufacturing efficiency, contributed by higher sales volume, and a favourable trend of commodity prices, particularly sugar and milk powder.

Basic earnings per ordinary share were HK48.9 cents, an improvement of 30% compared to last interim period. The Board of Directors recommends an interim dividend of HK3.8 cents per ordinary share (1H FY2017/2018: interim dividend of HK3.8 cents per ordinary share).

Mr. Winston Yau-lai Lo, Executive Chairman of Vitasoy, said at the press conference today, "The broad-based growth in the first half of the Fiscal Year has surpassed our internal growth target. Mainland China was the fastest growing market and further enhanced its position as the company's largest segment. Our operations in Hong Kong, Australia and Singapore also reported growth in revenue, both in reporting and local currencies. Our local joint venture business in the Philippines continued to grow by gradually building the local soy category."

Driven by its "Go Deep Go Wide" strategy, Vitasoy Mainland China sustained its growth momentum with an increase of 33% and 42% in revenue and profit respectively in the first six months of this Fiscal Year. Vitasoy's new plant in Dongguan broke ground on 30^th October 2018 and production is expected to commence in 2021.

Vitasoy Hong Kong recorded promising growth while having made increased investments in manufacturing and logistic infrastructure. Revenue and profit increased by 4% and 5% respectively with a growth across its portfolio of products and main channels. Vitasoy's Australia and New Zealand business reported a 9% growth in revenue in local currency, supported by improved execution and product innovation. Vitasoy Singapore maintained its leadership position in the local tofu market, and continued to accelerate its imported beverage business.

"For the second half of the Fiscal Year, we expect our business to continue to be strong yet growing at a more moderate pace. Looking forward, we will stay focused on our sustainable growth strategy and make necessary investments to secure our solid market positions where we compete," concluded Mr. Lo.

Summary

Financial Highlights

Business Review

Mainland China --
Sustained high growth momentum in revenue and improving profitability

Under the "Go Deep Go Wide" strategy, Vitasoy Mainland China continued to report growth in both revenue and profit, fuelled by growth in sales volume, favourable material costs and currency as well as improved manufacturing efficiency. The Mainland China operation reported a 33% increase in revenue to HK$2,992 million and 42% increase in profit to HK$565 million.

Both VITASOY and VITA brands performed strongly, reflecting customers' increased preference for high quality, taste and sustainable products. The premium high nutrition range, VITASOY Health Plus, was relaunched in the market targeting health-conscious consumers. E-commerce operations continued to grow and play an integral role in promoting Vitasoy brands across the country.

The company has commenced the construction of its new Dongguan manufacturing plant after the ground breaking ceremony on 30^th October, 2018. Upon completion in 2021, it will be Vitasoy's largest production base in Mainland China.

Vitasoy Mainland China will continue to proactively address the intensified competitive environment with its increased investment in building brand equity and enhanced marketing efforts in product trials and promotions.

Hong Kong, Macau and Exports --
Accelerating growth behind increased investments

Vitasoy Hong Kong delivered a broad based growth across all product lines and main channels and reported an increase of 4% in revenue to HK$1,138 million and growth of 5% in profit to HK$194 million. E-commerce saw particularly strong growth from its small base.

The new VITASOY brand equity campaign with focus on the health benefits of soy consumption, launch of SAN SUI No Sugar Soya Milk and continued investment in CALCI-PLUS enhanced the overall growth while strengthening VITASOY's market leadership in Hong Kong's soya milk category. In the VITA tea category, a new variant Dong Ding Oolong Tea was introduced in the No Sugar Tea range and received positive customer response.

Vitasoy Hong Kong will focus on its core products and developing tailored innovations in communication and product range. The 2-year upgrade programme to increase manufacturing capacity and logistic infrastructure has been progressing smoothly, creating stronger fundamentals for future growth.

Australia and New Zealand --
Accelerating growth in a rapidly evolving plant milk market

Driven by the growth in the plant milk category and expanded VITASOY portfolio in major supermarkets, Vitasoy Australia achieved a 5% increase in revenue to HK$263 million. Excluding the impact of the depreciation of the Australian Dollar, revenue growth in local currency was 9%. The profit contracted by 8% to HK$45 million as the operation invested in new production line to support future innovation.

In the first half of this Fiscal Year, Vitasoy Australia has been driving its VITASOY Soya Milk Protein Plus and Almond variant products, while maintaining price and promotion competitiveness. As the market keeps evolving ever more rapidly, the operation will continue to invest in product innovation, which will be an important growth driver for the rest of the Fiscal Year and going forward.

Singapore --
Continued leadership in tofu with growing imported beverage sales

Vitasoy Singapore recorded a 9% increase in revenue to HK$54.7 million and secured market leadership in its core tofu business. Their imported beverage business reported an accelerated growth. The operation recorded a profit of HK$0.9 million as it continued to scale up its business with increased investment in advertising and organizational capability. For the second half of the Fiscal Year, it will continue to grow both its core tofu business and imported beverage portfolio to accelerate the scaling up of the operation.

The Philippines --
Local JV focused on building higher brand awareness

The joint-venture business continued to increase public awareness of VITASOY platform and its health benefits, drive product trials and adoption across both on-the-go and home consumption occasions. The local team will focus on building business scale through continuing to bring new product users to the brand and gradually expanding the soya milk category in the Philippines.

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 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