10th July.,
2002
Vitasoy maintains sales growth despite
sluggish retail market
Continued product and market diversification ensures
long-term growth in sales and profitability
Hong Kong, 10 July 2002 - Vitasoy International
Holdings Limited (VIHL) (SEHK Code: 0345), a leading
manufacturer and distributor of non-carbonated beverages
and food based in Hong Kong, today announced its annual
results for the year ended 31 March 2002.
Total turnover rose by 8.9 percent to HK$2,192 million,
underpinned by the positive sales growth in markets
where VIHL operates.
During the year under review, gross profit grew by 8.6
percent to HK$1,208 million, while gross margin was
55.1 percent, which was close to 55.2 percent achieved
in last fiscal year.
Profit attributable to shareholders was HK$87 million,
a decrease of 32 percent from the corresponding period
last year. The profit decline was primarily due to the
start-up cost of a new plant in Australia and costs
associated with the launch of Refrigerated Soymilk and
Seasoned Tofu products in the North American market.
During the period under review, two non-recurring items
also impacted the performance of the Group. These were
the restructuring costs and compensation costs of a
traffic accident in the United States. Excluding the
two non-recurring items which totaled HK$16 million,
profit attributable to shareholders dropped by 19.5
percent to HK$103 million.
The Group's basic earnings per share were HK8.9 cents
(2001: HK13.2 cents per share). The Group's board of
directors has proposed a final dividend of HK5.1 cents
per share (2001 final dividend: HK5.1 cents per share).
This, together with the interim dividend of HK2.8 cents
per share (2001 interim dividend: HK2.8 cents per share),
would make the total dividend for the whole year HK7.9
cents per share (2001 total dividend: HK7.9 cents per
share).
Commenting on the results, Winston Lo, VIHL Executive
Chairman, said: "We are pleased with the sustained
sales growth in our markets, which again demonstrates
our successful strategy of product and market diversification.
"To grow our global business, we have continued
with strategic investments in both North America and
Australia, which has affected the Group's profitability
in the short-term."
The Group maintains a healthy balance sheet. As of 31
March 2002, the Group was in a strong net cash position
of HK$132 million, enabling it to maintain a stable
dividend payout policy.
According to Mr Lo, VIHL has committed to ongoing cost
improvement by embarking on an effective strategy of
making the Mainland its chief source of materials, implementing
an effective supply chain management system and outsourcing
PET plastic bottled drink products.
Hong Kong remains the Group's largest market and main
revenue base. Continued investment in product development
and extension to a wider spectrum of consumers and aggressive
advertising campaigns helped sustain sales growth of
7.1 percent in the face of stiff competition.
"In view of the competitive market environment,
the Group has focused on ensuring the presence of a
value-added element in its products and services,"
said Mr Lo, citing the introduction of new products
such as VITA GOR YIN HAR Fruity Tea and Water, VITA
range of Green Tea and Family Milk, which met with great
success in Hong Kong. A total of 20 new products were
introduced during the year under review.
The Hong Kong market performance was further enhanced
by the strong growth of the Group's tuck shop business.
Sales grew by a significant 21.8 percent and the number
of tuck shops increased to 169 from 144 a year ago.
This was attributable to the Group's ongoing investment
to improve the competitive edge of its tuck shop business
by implementing a "one stop" strategy. For
instance, the Group set up Hong Kong Gourmet Limited
in May 2001 to supply healthy and nutritious lunch boxes
to schools.
The North American market continued to maintain sales
momentum with a 12.2 percent increase in value terms.
The growth was largely led by Refrigerated VITASOY Natural
Soymilk, which saw sales grow by 138.7 percent. Significant
investment was made in penetrating a wider segment of
the mainstream market, in order to increase the Group's
presence in North America.
Mr Lo said: "North America remains a key market
with great long-term potential. Hence, the Group will
strengthen its marketing and distribution with the aim
of expanding its customer base in the mainstream segment.
In addition, the restructuring of the East Coast and
West Coast businesses should bring annual savings of
HK$9.4 million. All these initiatives are expected to
improve overall performance of the North American operation
in the long term."
In the Mainland, the Group continued its strategy of
product diversification and solidifying its leadership
in the soymilk markets in Southern and Northern China.
Sales in the Mainland were mixed. Sales growth was concentrated
in Southern China, which registered stable growth of
8.8 percent. However, this was partially offset by the
decline in sales in Eastern/Northern China. Overall
sales of the Mainland operation remained flat during
the year under review.
The Australian and New Zealand markets continued to
demonstrate good potential as the Group commissioned
its first production plant in Wodonga, Victoria. Sales
maintained a double-digit growth, thanks to the launch
of Refrigerated Soymilk and higher selling price derived
from direct sales to retailers. However, the soymilk
market as a whole was affected by the deregulation and
lower prices in the dairy industry.
"With the commissioning of the Wodonga plant, the
Group's primary strategy is focused on boosting sales
volume by launching new products and expanding distribution,
thereby securing a larger and more stable customer base,"
said Mr Lo.
Sales of the Group's export markets have been growing
steadily, especially in Europe, which registered sales
growth of 25 percent. During the year under review,
the Group also expanded its global market network to
Germany, Spain, Croatia and Peru. The Group targets
to boost sales in these markets by introducing the VITASOY
Premium Organic Soymilk range to the existing Natural
VITASOY range.
Moving forward, the Group is optimistic that investments
in product and market diversification will translate
into a broadened revenue base and profitability in the
medium and long term. "This strategy has generated
higher sales in markets such as Australia and North
America, and we are confident these investments will
further strengthen our presence in markets where we
operate.
"We firmly believe the Group will continue to profit
from the increasing awareness of the health benefits
of soy, especially in markets like North America, Australia
and Europe. The Group's strong financial position will
ensure that we are in a good position to take advantage
of expansion opportunities," concluded Mr Lo.
Vitasoy International Holdings Limited
is one of the leading manufacturers and distributors
of non-carbonated drinks with a base in Hong Kong. Founded
in 1940 and with production facilities in Hong Kong,
Mainland China, the United States and Australia, Vitasoy
has successfully developed and launched more than 140
products in different forms and sizes that are consumed
in over 30 markets throughout the world.
-- END -
For more information, please contact:
Stella Lung
Public Relations Manager
Vitasoy International Holdings Limited
Tel: 2468 9644 Fax: 2465 1008
e-mail:pubrel@vitasoy.com
Kennes Young / Sue Gourlay
Golin/Harris Forrest
Tel: 2501 7987 / 2501 7936
Fax: 2810 4780
Email: kennes.young@golinharris.com.hk
/ sue.gourlay@golinharris.com.hk
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