Vitasoy to skip interim dividend as profits plungedFinance | 25 Nov 2021 2:15 pm
Vitasoy International Holdings (0345) saw its interim net profit slump by 95 percent to HK$32.80 million, as a result of a boycott of its product by mainlanders triggered by a July memo offering condolences to the family of a worker who had stabbed a police officer.
Given the disappointing results and the priority being given to restoring the performance of the mainland business, the beverage firm declared no interim dividend, according to its result announcement.
Revenue slid 18 percent to HK$3.60 billion year on year for the six months ended September 30. Of which, the figure from the mainland operation, which takes up 62 percent of the total, dropped 28 percent to HK$2.27 billion, or 35 percent in local currency, due to products being off the shelves during the July – September peak summer months.
The mainland unit recorded a loss of HK$32.58 million for the first half, compared to a profit of HK$742.62 million last year.
By comparison, the mainland unit accounted for over 70 percent of the total revenue for the same six-month period in 2020.
But, sales are forecast to improve as products have been back on the shelves since end-September and advertising campaigns are restarting on a province-by-province basis,
Meanwhile, the group grew its revenues in other operations including Hong Kong, Australia and New Zealand, and Singapore.
Despite a 3 percent jump in revenue, profit from the Hong Kong operations dropped 42 percent to HK$124.07 million, mainly resulting from significantly lower government subsidies and higher investment spending to support anticipated peak season demand compared to the previous interim period.
Excluding government subsidies, profit from operations dropped by 8 percent.