Back in the black: Yeo’s ASEAN profitability aids performance despite leadership overhaul and China setbacks
Yeo’s published its FY2022 full-year financial results at the end of February 2023, reporting a year-on-year 6% growth in revenue to S$358.1mn (US$266mn) and net profits of S$2.4mn (US$1.8mn) which was a growth of approximately 1.6 percentage points from the year before.
This was a significant achievement for the firm as it is the first time it has posted positive net profits in three years. its FY2020 reported results showed a net loss of S$10mn (US$7.4mn) and FY2021 results a net loss of S$1.7mn (US$1.3mn).
A lot of this growth can been attributed to Yeo’s performance in its home base markets Malaysia and Singapore, as well as other markets in the South East Asian region.
“Revenue in Malaysia grew 7.8% year-on-year to approximately S$155mn (US$155.1mn), and in Singapore grew 1.4% to S$81.8mn (US$60.8mn) [based on] successful route to market executions, higher selling prices and revenue growth management,” Yeo’s reported via documentation posted to the Singapore Exchange (SGX).
“Indochina markets also showed strong momentum that delivered 11.4% growth in revenue year-on-year from higher selling prices and a successful route to market evolution in these markets.”
The Indochina region is a part of South East Asia that comprises Vietnam, Cambodia, Laos, Myanmar and Thailand.
This return to profitability was doubly significant for the firm as it was achieved despite COVID-19 related negative impacts in China, one of its most important international markets.
“China revenue declines by 11.8% year-on-year to S$31.4mn (US$23.3mn) from S$35.6mn (US$26.4mn) the year before due to COVID-19 control lockdowns and an overall negative environment,” the firm stated.
“This brought China’s contributing percentage to group revenue down to 9% from 11% previously. Malaysia’s contributing percentage rose 1% to 45%, Singapore and Indochina remained steady at 12% and 9% respectively.”
The company also faced challenges from a switch in leadership last year, when Group CEO Samuel Koh announced his resignation in December 2022 to ‘pursue other interests’, according to a separate formal statement published by the firm.
Koh had resigned after less than two years at the helm of Yeo’s, having only ascended to the Group CEO position in March 2020 after joining the company two months prior after a decade with Coca-Cola. As of time of writing, Koh has not updated his LinkedIn profile with any details of his resignation.
Yeo’s is now being led by new CEO Ong Yuhhwang, who was promoted to the role after serving as COO of the firm for five months since September 2022.
Challenges still expected ahead
Despite having made its way back into the green, the firm aims to tread cautiously in 2023 due to ongoing inflationary and economic challenges, much like many other major food and beverage brands have highlighted as of late.
“Operating cost inflations continue to pose headwinds to [operations, so we] will focus on driving higher margin products growth and cost reductions so as to improve business performance,” Yeo’s highlighted in another statement on FY2023 outlook.
“Company leadership and management will also review the operational structures so as to further drive operational efficiencies and commercial excellence across the entire value chain.”