Sa Sa, Vitasoy profits rise but yuan woes loom

Business | Tereza Cai 22 Nov 2018

Two Hong Kong firms, Sa Sa International (0178) and Vitasoy International (0345), said their businesses are expected to be negatively impacted by the weak yuan, although they both recorded first-half profits.

Sa Sa said its interim net profit for the six months ended September 30, 2018, rocketed 84.5 percent year-on-year to HK$203 million, with the company declaring an interim dividend of 7 HK cents.

Basic earnings per share amounted to 6.7 HK cents as compared to 3.7 HK cents for the previous period. Turnover increased by 16.3 percent to HK$4.15 billion, the beauty and health care retailer said.

Retail sales in Hong Kong and Macau rose 18.5 percent to HK$3.49 billion but its losses in the mainland surged 110 per cent to HK$15.91 million, as gross profit margins dipped 2.8 percentage points to 49 percent.

The loss in its e-commerce business rose 4.1 percent year-on-year to HK$16.99 million, mainly due to currency losses from the depreciation of the yuan. Meanwhile, same-store sales growth in Hong Kong and Macau was 15.8 percent as compared with last year.

The total number of stores with continuing operations increased by 11 to 273, Sa Sa added.

Vitasoy, meanwhile, posted a 30 percent increase in interim net profit to HK$518 million for the first half of the financial year, driven by improving efficiency in manufacturing and a favorable trend of commodity prices, particularly sugar and milk powder.

The food and beverages manufacturer said it will pay an interim dividend of 3.8 HK cents.

Revenues increased 22 percent to HK$4.45 billion and basic earnings per share was 48.9 HK cents, up from 37.7 HK cents a year ago.

It noted that the financial risks faced by the group were "mainly connected with uncertainties in interest rates and exchange rate movements."

Shares in Sa Sa rose 3.55 percent to HK$3.50 while shares in Vitasoy ended HK$25.80, up 3.82 percent.

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