Vitasoy revenues rise on the back of successful China growth strategy

By Gary Scattergood contact

- Last updated on GMT

Vitasoy said "mainland China will continue to scale up".
Vitasoy said "mainland China will continue to scale up".

Related tags: Soy milk

Hong Kong-listed soy milk and tofu manufacturer Vitasoy has seen revenues rise by 21% but profits dip by 14% for the first half of the year, largely due to the impact of the sale of its North American business in 2016.

Excluding the impact of the North American divestiture, the company reported 23% growth in revenue to HK$3,646m.

Driven by strong sales performance, the gross profit increased 19% to HK$1,922 million. The gross profit margin maintained at 53%.

Last year the firm sold its wholly-owned North American subsidiary, Vitasoy USA, to Pulmuone Foods of South Korea.

Executive chairman of Vitasoy Winston Yau-lai Lo said all regions had seen growth.

"Mainland China was the key growth driver for the interim performance, complemented by a moderate sales increase in Hong Kong and a steady growth in Australia

"The joint venture in the Philippines between Vitasoy and Universal Robina Corporation has started its operation smoothly with initial shipments to local customers."

During the interim period, Vitasoy China continued its "Go Deep Go Wide"​ strategy to boost sales and delivered revenue growth of 39%.

Vitasoy Hong Kong recorded a revenue decrease of 2% as the revenue from the North American divestiture was included in the previous interim period. Excluding this, the operation recorded 3% sales growth.

The Australia/New Zealand business reported 6% growth in revenue and maintained its leading position in the local plant milk market through product innovation like Vitasoy Almond Milk. Vitasoy Singapore's business grew 6% in overall revenue as imported beverages registered strong growth.

"For the second half of FY2017/2018, we expect to maintain a sustainable growth albeit at a more moderate level. While Mainland China will continue to scale up, we will invest in other markets to strengthen brand equities and execution as it is critical to secure our sustainable growth in the future,​" said Lo.

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