VITASOY INT'L(HK:00345)2022-07-25 08:23Financial Performance - Vitasoy's revenue for FY2021/2022 decreased by 14% to HK$6,501 million compared to HK$7,520 million in the previous year[21]. - The gross profit for the same period was HK$3,071 million, down 22% from HK$3,954 million[10]. - EBITDA fell significantly by 73% to HK$340 million from HK$1,281 million year-on-year[10]. - The loss attributable to equity shareholders was HK$159 million, a decline from a profit of HK$548 million in the previous year[21]. - Total assets decreased by 6% to HK$6,807 million from HK$7,276 million[15]. - Total equity attributable to equity shareholders dropped by 10% to HK$3,258 million from HK$3,616 million[15]. - The company did not recommend a final dividend for FY2021/2022, marking a 100% reduction from the previous year's dividend of HK$32.8 cents per share[10]. - The loss from operations was HK$213 million, a decline from last year's profit of HK$843 million, attributed to weaker sales in Mainland China and reduced COVID-19 subsidies[33]. - COVID-19 related government subsidies fell from HK$225 million in FY2020/2021 to HK$20 million in FY2021/2022, impacting overall profitability[33]. - Loss before taxation was HK$236 million, compared to a profit before taxation of HK$767 million last year[56]. - Cash and bank deposits amounted to HK$622 million, a decrease from HK$971 million as of March 31, 2021[59]. - The Group's total debt increased to HK$854 million, with bank borrowings rising to HK$490 million from HK$130 million the previous year[60]. - The gearing ratio increased to 26%, up from 14% in the previous year, reflecting a 12 percentage point rise[41]. - ROCE (Return on Capital Employed) dropped to 9%, down from 34% in the previous year, representing a decline of 25 percentage points[41]. Market Performance - In Mainland China, the company faced challenges due to the COVID-19 pandemic but saw improved performance in the second half of FY2021/2022 compared to the first half[22]. - Group revenues declined by 14% for the full Financial Year due to weak sales in Mainland China, despite solid growth in other markets such as Hong Kong SAR, Australia, New Zealand, and Singapore[32]. - Mainland China revenue declined by 23%, with a 28% decrease in local currency, although a strong recovery was noted in the second half of FY2021/2022[43]. - Hong Kong operations saw a revenue increase of 4%, driven by innovative products despite intermittent school openings[45]. - Australia and New Zealand experienced a 15% revenue growth, supported by the expansion of the Oat Milk portfolio as restrictions eased[45]. - Revenue from external customers in Mainland China declined by 28% in local currency and 23% in HKD terms, resulting in an operating loss of RMB280 million compared to a profit of RMB457 million in the previous year[75][76]. - Net sales revenue in Hong Kong reached HK$1,934 million, representing a growth of 4% over the previous year, despite challenges from COVID-19 restrictions[80][82]. - Singapore's revenue from external customers grew by 3% to HK$122,091 thousand, while the operating loss was SGD2,198,000, down from a profit of SGD529,000 in the previous year[89][90]. Strategic Initiatives - The company is prioritizing business recovery following the challenging operating environment[21]. - New product launches such as VITAOAT and VITA Fresh Tea received strong consumer acceptance in Hong Kong, aiding recovery[22]. - The company is focusing on core portfolio execution and strategic innovation to gradually restore growth trajectory[29]. - To counter rising material costs, the company is taking selective pricing actions and locking in raw material prices in procurement contracts[34]. - The company is committed to innovation, aiming to bring new products to market that appeal to different consumer segments[34]. - For FY2022/2023, the company aims to restore year-on-year profitable growth through execution, expansion, and innovation strategies[93]. - New brand equity campaigns will be launched for VITASOY and VITA in Mainland China, alongside continued innovation in existing product lines[94][96]. - The company plans to selectively expand product availability in high-potential areas of Mainland China[96]. - The joint venture in the Philippines focuses on building brand awareness and adoption, with plans to activate single-serve platforms post-COVID-19 restrictions[98]. - The plant-based movement presents a unique opportunity for Vitasoy to expand its mission of providing nutritious plant-based food and beverages[100]. Corporate Governance - Vitasoy's corporate governance practices emphasize transparency, independence, and accountability, with regular reviews to enhance compliance[105]. - The Board of Directors includes five independent non-executive directors, ensuring diverse knowledge and skills[107]. - The company achieved a 99% average attendance rate at Board meetings during FY2021/2022[108]. - Vitasoy has complied with the amended Corporate Governance Code, implementing key compliance enhancement initiatives[110]. - The company has established a defined schedule of matters reserved for Board decisions, ensuring accountability and compliance with regulatory requirements[127]. - The governance framework is regularly reviewed to maintain its effectiveness[143]. - The Company has established a Remuneration and Nomination Committee, an Audit Committee, an Executive Committee, and an ESG Committee[176]. - The Board ensures compliance with good corporate governance practices and promotes a culture of accountability and integrity[165]. - The Company actively engages with stakeholders to ensure effective communication and promote corporate culture[165]. Risk Management and Compliance - The Group's risk management framework has been enhanced to address emerging risks and improve key risk indicators in a rapidly changing business environment[71][72]. - The Company monitors and reviews the effectiveness of its risk management performance regularly[168]. - The Audit Committee is responsible for monitoring the implementation and effectiveness of the Whistleblowing Policy[198]. - The Company is committed to maintaining effective internal controls and compliance with legal and regulatory requirements[197]. - The Company reviewed compliance with the Corporate Governance Code and related disclosures[197]. Sustainability and ESG - The Environmental, Social and Governance (ESG) performance continues to improve, as evidenced by better external ratings[26]. - The company is committed to accelerating its performance in Environmental, Social, and Governance (ESG) deliverables[100]. - Vitasoy's commitment to sustainability is integrated into its corporate philosophy, guiding its operations and product development[116].