Vitasoy International Holdings, the Hong Kong-listed, plant-based food and beverage business, has issued a profit warning.

It said its sales have been hit by the enforcement of measures linked to Covid-19 and social unrest in the territory.

The firm, which makes products such as soya milk and tofu under its own name, told the Hong Kong Stock Exchange (HKEX) in a statement it expects to record a “substantial decrease” in profit attributable to shareholders for the year ending 31 March – approximately 25-35% compared to the year ended 31 March 2019.

Vitasoy said the estimate was based on its unaudited consolidated management accounts for the 11 months ended 29 February and information currently available to the board,

The company said the decrease is attributable to various measures being enforced in a number of provinces and municipalities in mainland China to curb the outbreak of Covid-19.

“These measures significantly disrupted our route-to-market planning and supply chain across mainland China, and particularly for the business in Wuhan City and Hubei Province which was the epicentre of the epidemic,” it said.

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By GlobalData

“As [a] large proportion of our mainland China business was contributed by general trade channels, [the] closure of small retail stores across the country impacted our business.”

Vitasoy said weaker market sentiment in Hong Kong due to social unrest in the second half of 2019 had also been a factor and that this had deteriorated further since the onset of the epidemic. 

It added: “Take-home sales were weaker as shoppers’ attention was diverted to the purchasing of other daily necessities.

“Since consumers chose to avoid crowded areas, traffic of on-the-go channel has also been significantly affected. Sales from our school tuck shops have been halted as the local government imposed school closures in November 2019 and during the epidemic.”

Vitasoy said it is in the process of finalising the annual results for the year ending 31 March which are expected to be released before the end of June.

In the year ended 31 March 2019, Vitasoy recorded EBITDA of HKD1.23bn (US$158.6m)