HONG KONG, June 15, 2018 /PRNewswire/ — Vitasoy International Holdings Limited (SEHK Code: 00345) today reported a growth acceleration for its annual results ended 31st March 2018 ("FY2017/2018"), building on a high momentum of its Mainland China business, solid growth in its other operations and favourable currency appreciation.
Excluding the one-off gain of the divestiture of the North American Mainstream and SAN SUI business in FY2016/2017 (the "North American divestiture"), the company achieved a year-on-year growth of 21% in revenue and 14% in profit attributable to equity shareholders in FY2017/2018.
When including the impact of the North American divestiture, Vitasoy registered a 20% growth in revenue to HK$6,465 million while profit attributable to equity shareholders dropped by 5% to HK$586 million in FY2017/2018.
Gross profit increased by 19% to HK$3,420 million, attributed by higher sales volume. Despite the rising commodity prices, Vitasoy managed to maintain gross margin level at 53% through improved manufacturing efficiency resulting from increased sales volume.
The Board of Directors recommends a final dividend of HK31.4 cents per ordinary share. (FY2016/2017: final dividend of HK27.1 cents per ordinary share and a special dividend of HK4.2 cents per ordinary share). Together with the interim dividend of HK3.8 cents per ordinary share (FY2016/2017: an interim dividend of HK3.8 cents per ordinary share), the total dividend for FY2017/2018 will be HK35.2 cents per ordinary share (FY2016/2017 total dividend: HK35.1 cents per ordinary share).
Mr. Winston Yau-lai Lo, Executive Chairman of Vitasoy, said at the press conference today, "The performance was ahead of our goal to deliver ‘Sustainable Growth’ amidst increasingly competitive market conditions. Driven by the ‘Go Deep Go Wide’ strategy, Mainland China continued to be a growth engine while other key markets including Hong Kong, Australia and New Zealand and Singapore operations registered solid performance reaffirming our market leadership. We are also pleased to see an encouraging market response to Vitasoy products in the Philippines after the first few months of operation through our joint venture there."
Vitasoy China delivered a strong performance with a 39% increase in revenue and 71% improvement in profit from operation, with robust growth in all geographical regions and acceleration of e-commerce sales.
In Hong Kong, Vitasoy maintained its dominant market share in the plant-based category during the year. Net of North American divestiture, revenue from Hong Kong operation was flat on local basis.
To support future sustainable growth, Vitasoy has planned to build a new plant in Changping Town of Dongguan City, Guangdong Province in Mainland China and to commence a 2-year investment programme to upgrade production capability and efficiency in Hong Kong.
During the year, Vitasoy’s Australia and New Zealand business delivered a 6% revenue growth resulted from integrated marketing campaign and new product offerings. Vitasoy Singapore recorded an increase of 3% in revenue and maintained its market leadership in tofu market despite keen competition.
Regarding the market outlook, Mr. Lo said, "We expect a more moderate yet solid growth in the coming year while cycling the accelerated growth performance of FY2017/2018. As the markets become more crowded and competitive, we will stay committed to focusing on sustainable growth and continuous strengthening of our brand equities and organisational capabilities to continue supporting the scaling up of our business under our ‘Sustainable Growth’ strategy."
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
For more information, please contact:
Senior Public Relations Manager
Vitasoy International Holdings Limited
Tel: +852 2468 9644
Tel: +852 2837 4721
Year ended 31st March
FY2017/18 HK$ Mn
FY2016/17 HK$ Mn
Revenue (excluding impact of the North American divestiture)
Gross Profit (excluding impact of the North American divestiture)
EBITDA (Earnings Before Interest Income, Finance Costs, Income Tax, Depreciation, Amortisation and Share of Losses of Joint Venture)
EBITDA (excluding impact of the North American divestiture)
Profit before taxation
Profit Attributable to Equity Shareholders of the Company
Profit Attributable to Equity Shareholders of the Company (excluding impact of the North American divestiture)
Basic Earnings per Share (HK cents)
Basic Earnings per Share (HK cents) (excluding impact of the North American divestiture)
Final dividend per share (HK cents)
Mainland China — ‘Go Deep Go Wide’ strategy delivers accelerated growth in sales and profit
Vitasoy China achieved particularly strong growth during the year under our effective execution of the ‘Go Deep Go Wide’ strategy, complemented by strong brand equity impact and e-commerce growth. Vitasoy China recorded 39% increase in revenue to HK$3,700 million and 71% growth in profit from operation to HK$542 million.
The main drivers of growth were favourable margins, expansion of sales volume and continuous improvement in efficiency. Both VITASOY and VITA brands performed strongly.
It is expected that Vitasoy China will continue to gradually increase its growth contribution to the company. To support its future expansion, Vitasoy has announced the development of a new production facility in Changping Town of Guangdong Province in 2017. This programme is progressing smoothly, and production is expected to commence by April 2021.
Considering the increasing fragmentation and competition in the soymilk and plant-based beverage market, Vitasoy China will focus on building brand equity, improving execution, strengthening organization and securing appropriate investments to support our expansion.
Hong Kong, Macau and Exports — Stable business, investing for future development
Riding on the strong performance of core and innovative products, Vitasoy maintained its dominant market share in the plant-based category in Hong Kong market in FY2017/2018. Revenue increased by 2% to HK$2,159 million, net of North American divestiture. Profit from operation decreased by 8% mainly due to provision made as part of the company’s 2-year investment programme to upgrade production and logistics infrastructure.
During the year, Vitasoy Hong Kong continued to expand its portfolio by introducing new plant milk offerings such as Almond Milk, Coconut Milk and upgraded Soy Milk with Plant Sterol under VITASOY CALCI-PLUS brand, to accommodate increasing market demand towards premium and healthy products.
Amidst severe impact by Typhoon Hato in August 2017, the Macau business turned around and delivered strong results. The export business also performed well due to expansion in outlet coverage and attractive in-store executions.
Looking forward, Vitasoy Hong Kong will concentrate on increasing its very high per capita consumption and market leadership across segments. It will also keep improving production capability and efficiency through a 2-year investment programme.
Australia and New Zealand — Solid improvement in performance and brand equity
Vitasoy’s Australia and New Zealand business achieved 6% of growth in revenue to HK$502 million, mainly driven by more sales recorded in supermarkets.
During the year, Vitasoy Australia commenced a new master brand communication campaign with refreshed and unified packaging across the entire product portfolio. The initiative has been well received by consumers. It further solidified Vitasoy’s leadership position in plant milk in the local market.
Complementing the hugely successful Soy Milky range, Vitasoy Australia launched the new Almond Milky and Coconut Milky product ranges in the year.
Facing intensified competition and price deflation in the plant milk category, Vitasoy Australia will leverage its brand equity and portfolio innovation to drive scale without compromising in sustaining the revenue.
Singapore — Continued market leadership in tofu and increasing beverage market share
Vitasoy Singapore recorded a 3% increase in revenue to HK$104 million in FY2017/2018. It maintained its market leadership in tofu business despite changing consumer preference and competition from imported tofu. In order to scale up the business, the operation increased investment in advertising and promotion, infrastructure and people, impacting profit from operation, resulting a decrease of 36%.
During the year, Vitasoy Singapore continued its product innovation which is essential for it to maintain leadership position and drive business growth. The operation added VITASOY Chawanmushi, UNICURD Beancurd 500g and UNICURD food service Egg Tofu to the tofu product range and launched VITA Low Sugar Green Tea and VITA Low Sugar Jasmine Tea to the tea market.
In the year ahead, the local team will focus on maintaining its market leadership in tofu by enhancing the premium VITASOY brand and relevant innovation, and evolving the model for the beverage business.
The Philippines — High awareness received in local market
The new joint-venture business in the Philippines has built high awareness in the local market by the success of a series of communication programmes and product trials. The soy market is ripe for growth in the Philippines. Looking ahead, Vitasoy will continue to build awareness to progressively scale up the local operation and provide meaningful contribution to Vitasoy’s revenue.