Acceleration in core business drives rise in group profit

Acceleration in core business drives rise in group profit

Hong Kong-listed plant-based food and beverage maker Vitasoy International Holdings today (23 June) reported a 43% rise in annual profits, with market share rising in its "core markets" and a boost from "favourable" raw material costs.

Vitasoy booked net profit of HKD531m (US$68.5m) for the group's 2015-16 financial year which ended on 31 March.

The company said its performance had been driven by an "acceleration in core business". Revenue increased by 10% while gross profit improved by 13%, with gross profit margin further increased to 51%.

Group executive chairman Winston Yau-lai Lo said: "The strong business results were driven by our consistent three-pronged growth strategy of execution, expansion and innovation. During the year, we built stronger market share and competitive positions in core markets. The improved profitability is attributable to enhanced manufacturing efficiency as a result of higher volume, favourable commodity prices and a better sales mix."

Among Vitasoy's core markets, revenues in mainland China rose 25% to HKD2.4bn. Operating profit from the market surged by 41% to HKD281m "due to favourable raw material prices and improved manufacturing efficiency".

Vitasoy said the group further boosted its operational efficiency in China during the year following the launch of a "state-of-the-art IT system" and the completed construction of a new facility in Wuhan, in Hubei Province, last March.

The Hong Kong business reported just a 1% growth in revenue to just over HKD2bn against the backdrop of "a challenging operating environment". However, profit from Hong Kong operations increased 7% to HKD380m as a result of increased manufacturing efficiency and favourable commodity costs of raw materials.

Vitasoy said growth in its Australia/New Zealand and Singapore businesses was "promising, although the weak Australian dollar has adversely impacted the results reported in Hong Kong dollars with a 12% drop in revenue". Nevertheless, Vitasoy's Australian arm continued to support its plant milk portfolio with a new campaign highlighting Australian-grown soy products. The group said its Australian operation also expanded into the almond milk sector with original and unsweetened variants.

In Singapore, the group's wholly-owned subsidiary, Unicurd, reported a 23% increase in its revenue, including the business of imported beverages, to HKD106m. Operating profit increased by 38% to HKD11m.

In March, Vitasoy sold a chunk of its business in the US to South Korean tofu maker Pulmuone Co. Vitasoy said the deal would help it focus on its businesses in Hong Kong and mainland China.