Vitasoy International (0345) H1 2020 earnings summary

Executive summary

• H1 FY2020 revenue rose 5% in HKD and 9% excluding FX; profit to shareholders grew 3% in HKD and 7% excluding FX, on top of exceptional prior-year growth.

• Operating profit grew 5% excluding FX, with slower growth reflecting higher brand and organizational investment and pressure in Hong Kong and Australia.

Financial highlights

• Gross margin increased 1 percentage point to 55%, supported by manufacturing efficiency and favorable sugar and paper-packaging prices.

• EBITDA was ~HKD 900m, up 9%; profit before tax rose 1% to HKD 713m.

• Profit attributable to shareholders increased 3% in HKD, or 7% excluding FX; basic EPS rose 3% to HKD 0.502.

Outlook and guidance

• H2 priorities include sustaining mainland China growth and managing slower performance in Hong Kong and Australia; negative Australian drought impacts are expected to continue.

• Higher spending and investment will continue to support brand equity and execution as mainland China scales up.

• Long-term prospects remain supported by favorable plant-based product trends and demand for tasty, nutritious, sustainable products.