Yeo Hiap Seng 1H21 net loss narrows on growth in food and beverage revenue

Yeo Hiap Seng's tea and Asian drink brands. Credit: Yeo's websiteYeo Hiap Seng's tea and Asian drink brands. Credit: Yeo's website

Yeo Hiap Seng reported Tuesday its first half net loss narrowed to S$1.2 million from S$6.7 million in the year-ago period on double-digit growth in core food and beverage revenue and positive momentum in some overseas markets.

Revenue for the January-to-June period increased 4.2 percent on-year to S$169.3 million, with strength across most markets, the soft drink maker said in a filing to SGX.

Growth momentum was strongest in Malaysia and China, which includes Hong Kong, as revenue for both regions increased 21 percent on-year, Yeo Hiap Seng said.

“This is especially encouraging given Malaysia’s position as one of our home markets and major revenue contributor to the group, while China is one of our focus markets driving our next phase of growth,” the company said. “Within the Indochina region, we achieved
high double-digit revenue growth in Vietnam, albeit coming off a lower base given it is a relatively newer market for the group.”

The company issued a cautious outlook.

“While we are cautiously optimistic about the growth momentum coming from some of our higher growth markets such as China, the operating outlook of our home markets in Malaysia and Singapore, as well as the neighbouring region remains uncertain due to the worsening and/or new waves of Covid-19 infections in some of these countries,” Yeo Hiap Seng said.

“Governmental measures such as the capacity limitations on dining-in at F&B establishments, various degrees of lockdowns and movement controls not only might impact the demand on Yeo’s products, but might pose supply chain and production challenges, as the group has significant production operations in Malaysia,” the statement said. “The group also potentially faces labour shortages at our production facilities from time to time as governmental measures, which evolve with the pandemic situation, restrict workers’ movement.”

Yeo Hiap Seng said it has also made a US$1 million investment in the pre-series A+ convertible preference shares of Singapore-based Next Gen Foods, via subsidiary YHS Investment.

The company is a Singapore-based heritage brand offering Asian beverages, including a popular range of soybean and chrysanthemum drinks.

Yeo’s brands include Yeo’s, H-Two-O, Pink Dolphin, Juscool, Justtea, Sparkle, Cintan, Yeogurt and Purete. In addition to beverages, Yeo’s also produces sauces for cooking.