Yeo Hiap Seng has reported lower earnings for the 1HFY2025 ended June 30, down 50.9% y-o-y to $1.58 million.

 

The group reported a 10.1% y-o-y lower revenue for 1HFY2025 of $148.6 million, and gross profit came in 13.7% y-o-y lower at $46.7 million.

 

Core Yeo&rsquo s F& B sales fell by 7.6% to $140.5 million, mainly due to earlier Chinese New Year shipment recognised in the prior calendar year and lower Hari Raya Sales in view of subdued consumer demand.

 

In addition, an absence of Oatly co-packing revenue of $5.6 million further contributed to the decline. Consequently, gross profit margin decreased by 1.3 percentage points (ppts) to 31.4%.

 

As at June 30, the group registered a net decrease in cash and cash equivalents of $7.6 million.

 

The group has not declared dividends for the 1HFY2025.

He is credited with reinvigorating the brand, reinforcing its Asian drinks segment leadership his cousin, Edward Ng, is to assume deputy chairman role

 

[SINGAPORE] Yeo Hiap Seng : Y03 +0.88% (YHS) announced on Tuesday (Mar 25) that its board chairman Daryl Ng, grandson of the late Ng Teng Fong, founder of Far East Organization (FEO), will step down from his role after its upcoming annual general meeting (AGM) on Apr 23.

 

The 46-year-old has served as board chairman for around five years and will concurrently step down from his role as non-independent, non-executive director after the AGM. No mention was made of his reasons for stepping down or future plans.

 

He will be succeeded by banking veteran Na Wu Beng, who has served as deputy chairman and independent director since 2023.

 

Na will be replaced by Edward Averrill Ng, 33, a non-independent, non-executive director of the company since Mar 1, 2024, who is the cousin of the outgoing board chair.

 

Edward Ng is also a grandson of the late Ng Teng Fong and the son of FEO&rsquo s chief executive officer Philip Ng. Daryl Ng is the son of Philip&rsquo s brother, Robert Ng, who is the chairman of Hong Kong-listed Sino Group, FEO&rsquo s sister company.

 

FEO is one of Singapore&rsquo s largest private landlords and property developers. The Ng family is a substantial shareholder of YHS.

 

Daryl Ng was first appointed as a director in 2018 and helmed the board as chairman from 2020. During his tenure, he led Yeo&rsquo s turnaround from losses to profits, steered it through the transformation of its business and rejuvenated the board with key appointments to enhance expertise and diversity, the company said on Tuesday.

 

&ldquo Under his leadership, Yeo&rsquo s reinvigorated its brand, accelerated innovation, and reinforced its market leadership in the Asian drinks segment in Singapore and Malaysia, all the while maintaining a debt-free balance sheet with robust cash reserves,&rdquo the company added.

 

Reflecting on his tenure, the outgoing board chairman said: &ldquo I am... confident that under Mr Na&rsquo s leadership, Yeo&rsquo s will continue to reach new heights.&rdquo

Na, a veteran banker with more than four decades of experience, has a wealth of leadership experience under his belt, having held pivotal roles across OCBC Group&rsquo s Singapore, Hong Kong, Indonesia, and China operations.

 

He has served as Yeo&rsquo s deputy chairman for nearly two years and currently serves as director of the Bank of Singapore, commissioner of OCBC Indonesia, and director of OCBC China.

 

Na said: &ldquo (Daryl Ng&rsquo s) vision and leadership have set a strong foundation for Yeo&rsquo s, and I look forward to building on this legacy to drive the company&rsquo s continued growth and success.&rdquo

 

Incoming deputy chair Edward Ng brings extensive leadership experience from his role as director at FEO, the company added.

Its board proposed a final dividend of S$0.02 per share, unchanged from the previous corresponding period

HIGHER sales volumes and compensation from oat milk maker Oatly lifted the net profit of Yeo Hiap Seng (YHS) by 9 per cent to S$3.7 million, for the six months ended Dec 31, 2024.

 

The company&rsquo s revenue for the half-year rose 7.7 per cent to S$163.2 million. The rise was driven by higher sales volume in Malaysia, Singapore and Indonesia, leading to a 6.9 per cent rise in food and beverage revenue to S$147.4 million. This came even as sales in China and Hong Kong fell.

 

The company also booked a net profit of S$7.3 million for the year from the closure of Oatly&rsquo s Singapore manufacturing facility, for which it was compensated.

 

Its board proposed a final dividend of S$0.02 per share, unchanged from the previous corresponding period. The payment date has yet to be announced.

 

KEY POINTS H2 FY2024

 

Revenue: S$163.2 million (+7.7%)

 

Net profit: S$3.7 million (+9%)

 

Final dividend per share: S$0.02

 

For the full year, however, YHS&rsquo revenue fell 1.2 per cent to S$328.6 million, due to lower sales volume in what it dubbed the &ldquo co-packing revenue&rdquo segment. It also cited challenges in the China, Hong Kong, and US markets. Its FY2024 net profit rose 2.6 per cent to S$6.9 million.

 

The company also recorded an assets/investments impairment of S$7.7 million, which it attributed to the &ldquo challenging operating environment, particularly in China and Singapore&rdquo .

 

Looking ahead, YHS expressed &ldquo cautious optimism&rdquo about improving inflation. It plans to focus on higher-margin products and improve operational efficiency. &ldquo Initiatives aimed at enhancing productivity and managing cost dynamics will also be key priorities,&rdquo said YHS.

 

The group &ldquo will also explore growth opportunities in emerging markets, where long-term potential aligns with its strategic objectives&rdquo , it added.

The affected workers will receive severance packages based on their salary and years of service

YEO Hiap Seng will be laying off 25 employees as a result of Oatly&rsquo s decision to cease its manufacturing operations in Singapore.

 

This is in addition to the 34 Oatly workers affected by the closure, bringing the total to 59.

 

On Thursday (Dec 19), Yeo Hiap Seng said that a total of 41 employees were directly involved in Oatly&rsquo s manufacturing operations.

 

It noted that it has placed 16 employees in other roles within the company.

 

However, the remaining 25 employees will be retrenched and will receive severance packages based on their salary and years of service.

 

&ldquo The affected employees were specifically hired to support Oatly&rsquo s production at Yeo&rsquo s Senoko plant, and the layoff is a direct result of Oatly&rsquo s evaluation of its supply network,&rdquo it said.

 

Yeo Hiap Seng said that it has informed the Food, Drinks and Allied Workers Union (FDAWU) and is working with them to assist the affected workers.

 

In a statement on Thursday, FDAWU&rsquo s president Julie Cheong said that the union is engaging in negotiations with Yeo Hiap Seng to secure fair compensation packages for the affected workers, in line with unionised norms.

 

She added that FDAWU will render support to the affected union members and workers in Yeo Hiap Seng.

 

This includes providing job-matching support and career advisory services through the National Trades Union Congress&rsquo (NTUC) Employment and Employability Institute.

 

Cheong also said: &ldquo NTUC and FDAWU also appeal to companies that while retrenchments may be inevitable, it should only be used as a last resort.&rdquo

 

Companies must exhaust all other options before deciding to retrench workers and they should be &ldquo considerate about the timing of such exercises&rdquo , as well as avoid doing so &ldquo during festive periods, as far as possible&rdquo , she advised.

 

Yeo Hiap Seng&rsquo s chief executive Ong Yuh Hwang said: &ldquo We deeply regret having to make this decision. Our priority is to support our colleagues and to reduce stress and anxiety for them during this period.

 

&ldquo To this end, we will work closely with the union to ensure affected employees receive all the necessary resources during this challenging time.&rdquo

 

Ceasing production

On Wednesday night, Swedish drink manufacturer Oatly announced that it will be shutting its Singapore plant &ndash jointly invested with Yeo Hiap Seng for S$30 million &ndash after just three years in operation.

 

The Singapore facility, which operates under a co-packing agreement, will cease producing Oatly drink products by the end of this year.

 

While manufacturing operations will end, Yeo Hiap Seng said that it will continue to support Oatly&rsquo s distribution operations in Singapore and Malaysia.

 

The machinery related to the Oatly co-packing agreement will be transferred to Oatly, a spokesperson from Yeo Hiap Seng told The Business Times.

 

&ldquo Yeo&rsquo s will focus on producing Asian drinks and (the Senoko plant) continues to serve as a distribution centre for Singapore and exports,&rdquo added the spokesperson.

 

The company also said that the closure is not expected to have a material impact on its net tangible assets (NTA) per share.

 

Based on the exit agreement signed by both parties, Yeo Hiap Seng will receive an exit compensation of S$32 million, which will be paid in full by January 2027. This includes assets buy-out, compensation for order obligations, loans repayment and future lease payables.

 

The company also expects to book net other income of about S$10 million in the financial year ending Dec 31, and S$600,000 in FY2025.

 

Yeo Hiap Seng&rsquo s spokesperson said that it expects to &ldquo more than recover against our initial investment&rdquo .

 

&ldquo There is no direct asset impairment in relation to Yeo Hiap Seng&rsquo s assets acquired for the co-packing agreement,&rdquo said the company.

 

But it noted that since the co-packing agreement &ldquo helps to absorb some operating expenses&rdquo , the company will review any need for asset impairment for its Singapore assets at its FY2024 year-end audit.

 

Likewise, the amount is not expected to have any significant impact on the group&rsquo s NTA for FY2024, added Yeo Hiap Seng.

 

Going forward

As for Oatly, the facility&rsquo s closure is expected to improve its future cost structure and reduce its capital expenditure needs.

 

After the closure, Oatly&rsquo s expected growth in the Asia-Pacific region, excluding Greater China, will be supported by its existing facilities in Europe. These actions are expected to further increase capacity utilisation of the European factories, noted Oatly.

 

Oatly expects to incur non-cash impairment charges of between US$20 million and US$25 million in the fourth quarter of 2024, as a result of the closure.

 

It also projects restructuring and other exit costs to result in net cash outflows of between US$25 million and US$30 million through to 2027, after taking into account expected proceeds from selling certain equipment. The company expects to accrue for these costs in Q4 2024.

The move is to raise its exposure to the plant-based beverage industry in mainland China and Hong Kong

YEO Hiap Seng has further acquired 21.1 million shares in Vitasoy for HK$133.8 million (S$22.5 million), bringing its total shareholding in the Hong Kong-listed beverage manufacturer to 4 per cent.

 

On Thursday (Oct 17), the beverage manufacturer said it bought the shares at HK$6.34 apiece.

 

This is below the volume-weighted average price (VWAP) of about HK$6.46 per Vitasoy share for all trades done on Oct 16. It places the transaction&rsquo s value at HK$250 million.

 

Based on pro forma estimates, Yeo Hiap Seng&rsquo s increased stake in Vitasoy would not have any effect on its net tangible assets per share of S$0.89 for the financial year ended December 2023, though earnings per share would stand at a lower S$0.0094 as opposed to S$0.011.

 

Yeo Hiap Seng said its latest acquisition was in line with its strategy announced on Oct 9, when the group announced its purchase of some 17.6 million Vitasoy shares for HKS$103.6 million.

 

At the time, this represented an average price of HK$5.8849 per share, below Vitasoy&rsquo s VWAP of HK$5.995 per share for all trades done on the prior day.

 

In its Oct 9 filing, Yeo Hiap Seng said its move was in line with the group&rsquo s strategy of &ldquo investing in industry-leading companies in Asia&rdquo .

 

The earlier transaction had brought Yeo Hiap Seng&rsquo s total shareholding in Vitasoy to 2.04 per cent as at Oct 9, after factoring in its pre-existing shareholding of 0.4 per cent.

 

The deal was viewed to increase Yeo Hiap Seng&rsquo s exposure to the plant-based beverage industry in mainland China and Hong Kong, where Vitasoy has operations in addition to Australia, Singapore and the Philippines.

The group says consumer sentiments remain cautious in its key markets due to economic uncertainties

 

FOOD and beverage (F& B) group Yeo Hiap Seng : Y03 0% reported a net profit of S$3.2 million for the half year ended Jun 30, 2024, down 3.8 per cent from S$3.3 million in the year-ago period.

 

The decline was a result of lower sales for non-Yeo&rsquo s products, foreign currency impact and freight disruptions, said the group in a bourse filing on Tuesday (Aug 6).

 

Revenue decreased 8.7 per cent to S$165.3 million for H1 FY2024, from S$181.1 million for H1 FY2023, mainly due to the movements in foreign exchange rates and lower sales volume of non-Yeo&rsquo s core revenue.

 

Revenue from its core F& B business also dropped 4.1 per cent year on year to S$152 million due to foreign currency translation. Excluding this, core F& B revenue would have remained &ldquo relatively unchanged&rdquo compared to the same period last year, with sales growth in Malaysia and Singapore offsetting the weaker demand in other markets, it said.

 

Earnings per share stood at S$0.0052 for the half year, compared with S$0.0055 in H1 FY2023.

 

Gross profit margin inched up 0.2 percentage point to 32.7 per cent in H1, which the group attributed to its efforts in &ldquo cost optimisation and streamlining of its product portfolio&rdquo , offsetting the cost of inflation.

 

Meanwhile, administrative expenses fell 14.3 per cent year on year to S$17.1 million with tighter cost controls, and income tax expense decreased by S$2 million in H1 FY2024 to S$1.5 million due to the absence of under provision of prior years&rsquo deferred tax, it said.

 

No dividend was declared for the current financial period. The company said it &ldquo does not have a standing practice of declaring interim dividends&rdquo .

 

Moving forward, the group said consumer sentiments remain cautious in its key markets due to economic uncertainties. It said its focus remains on executing the group&rsquo s brand strategy and upgrading of its IT systems.

 

&ldquo These initiatives are aimed to strengthen the group&rsquo s business foundation to achieve higher growth and create sustainable value for customers and shareholders,&rdquo it said.

 

FOOD and beverage player Yeo Hiap Seng on Thursday (Feb 29) posted a 183 per cent rise in its net profit for the second half of 2023 to S$3.4 million, from S$1.2 million in the year-ago period. 

 

This came as gross profit margin for the half-year rose 3.4 percentage points on the year to 32.4 per cent on the group&rsquo s cost optimisation efforts, which had helped to mitigate the impact of inflation, it stated.

 

The result translates to earnings per share of 0.54 Singapore cents, higher than H2 FY22&rsquo s 0.2 cents.

 

Revenue, however, fell 14.2 per cent in the half-year to S$151.7 million. The group attributed this to lower sales volume in its Malaysia, Cambodia, the United States and China markets.

 

For the full year, group revenue fell 7.1 per cent to S$332.7 million, due to movements in foreign exchange rates, which more than offset sales growth in Malaysia and Indonesia.

 

Without the exchange rate movements, group revenue would have fallen by just 3.2 per cent, the group noted. The fall was due to subdued consumer sentiment worldwide, especially in Cambodia and China, the company said.

 

Net profit for the full year, meanwhile, grew 180.9 per cent to S$6.7 million, up from S$2.4 million in FY22.

 

The board has proposed a final dividend of two cents per share for FY23, on par with the dividend declared in the previous corresponding period.

 

In the year ahead, the company said the management will continue to work on optimising costs by driving &ldquo operational efficiency and commercial excellence&rdquo across its value chain, even as it works on executing its brand strategy and brand refresh initiative.

 

The group expects that operating cost inflation and softening of consumer spending amid economic uncertainties will continue to post headwinds to group operations.

 

FOOD and beverage player Yeo Hiap Seng : Y03 +1.54% reported a net profit of S$3.3 million for the half year ended Jun 30, 2023, more than two times the earnings of S$1.2 million in the year-ago period.

 

This comes despite a dip in revenue to S$181.1 million, down 0.1 per cent from S$181.2 million a year ago, on the back of lower sales in Australia, China and Europe, said the group in a bourse filing on Friday (Aug 11). 

 

Revenue from its core F& B business also dropped 4.5 per cent year on year to S$158.5 million due to foreign currency translation. Excluding this, the group&rsquo s core revenue would have remained &ldquo relatively unchanged&rdquo compared to the same period last year, it said. 

 

These decreases were offset by the Singapore and Malaysia markets, which saw better performance year on year, Yeo Hiap Seng said. 

 

Earnings per share stood at S$0.0055 for the half year, from S$0.002 in H1 FY2022. 

 

Gross profit margin rose 1.7 percentage points to 32.5 per cent in H1, from 30.8 per cent last year, which the group attributed to its efforts in &ldquo driving net price increase and optimising its product portfolio&rdquo , offsetting the cost of inflation.

 

Meanwhile, administrative costs grew 20.6 per cent to S$20 million and finance costs surged 69.7 per cent to S$387,000. 

 

No dividend was declared for the period under review. The group said it does not have a standing practice of declaring interim dividends, adding that it would be &ldquo prudent&rdquo to conserve cash, given the current market conditions. 

 

Moving forward, Yeo Hiap Seng highlighted that the market might remain challenging, in the face of operating cost inflation and an expected slowdown in consumer spending amid rising macroeconomic uncertainties. 

 

&ldquo (We) will continue to strive for cost optimisation to improve business performance by driving operational efficiency and commercial excellence across the entire value chain,&rdquo it said. 

 

FOOD and beverage player Yeo Hiap Seng : Y03 0% posted a net profit of S$1.2 million for the six months ended Dec 31, 2022, reversing a S$1.7 million net loss in the year-ago period.

 

This was mainly due to higher revenue and improved gross profit margins in the second half, Yeo Hiap Seng said in a regulatory filing on Tuesday (Feb 28).

 

Earnings per share in H2 2022 stood at 0.20 Singapore cent, compared with a loss per share of 0.29 cent in H2 2021.

 

Revenue for the period rose 4.9 per cent to S$176.8 million, up from S$168.6 million in 2021. This was mainly due to higher growth in its Malaysia operations, Yeo Hiap Seng said.

 

Gross profit for H2 2022 grew 11 per cent year on year to S$51.5 million, as a result of efforts to drive increases in net prices and optimisations in its product portfolio, it added.

 

The board has proposed a final dividend of two Singapore cents per share, unchanged from the previous year.

 

For the full year ended Dec 31, 2022, net profit stood at S$2.4 million, reversing a S$2.9 million net loss in FY2021. Revenue for FY2022, meanwhile, rose 6 per cent to S$358.1 million.

 

&ldquo Operating cost inflation continues to pose headwinds to the group operations,&rdquo said Yeo Hiap Seng. &ldquo Management will focus on driving higher margin products growth and cost reduction to improve business performance.&rdquo