Vitasoy International (0345) H1 2014 earnings summary

Executive summary

• H1 FY2013/14 sales and profitability grew across all categories and geographies, supported by innovation, manufacturing efficiency and cost control.

Financial highlights

• Turnover reached HKD 2.3bn, up 9% YoY; growth came from almost all operations.

• Gross profit was HKD 1.1bn, up 11% YoY; gross margin improved to 48% from 47%, despite higher milk powder and soybean costs.

• Profit before taxation rose 9% to HKD 265m; EBIT increased 7% to HKD 272m and EBITDA rose 6% to HKD 364m.

• Profit attributable to equity shareholders increased 6% to HKD 182m; basic EPS rose 5% to HKD 0.177.

Outlook and guidance

• Continued commodity-cost increases were expected to pressure gross margin in H2; disciplined cost management and margin protection remained priorities.

• Focus remained on core soy and tea, brand equity, product quality, holistic innovation, infrastructure and people capability.

• U.S. business expected a profitable H2, with seasonal volume and a more profitable mix reversing the H1 loss.