BEVERAGE player Yeo Hiap Seng (YHS) expects to post a net loss for FY2020 ended December, due to fallout from the Covid-19 pandemic in its key market Malaysia, the mainboard-listed company announced in a Friday bourse filing after the market close.

 

Besides the impact of the pandemic, the net loss is also expected to arise from the absence of one-off gains on asset disposals and fair value gains on financial assets, YHS said. The company had previously also warned of a net loss for H1 this year.

 

" The group started H2 on a cautiously optimistic note, as there were encouraging signs that the progressive lifting of lockdowns and restrictions in markets have improved consumer spending," it said in the filing.

 

However, renewed lockdowns and other issues in Q4 due to subsequent waves of Covid-19 in certain countries have raised uncertainties. In particular, YHS' key market Malaysia has seen a spike in cases, resulting in state lockdowns and the closure of factories.

 

" Notwithstanding the foregoing, the group will continue to adapt and execute on commercial strategies across our markets, including prioritising resources on grocery and e-commerce channels for at home consumption, launching new products and driving productivity," it said.

 

YHS added that it has a strong balance sheet that will help it navigate through the pandemic. The firm expects to announce its unaudited financial results for H2 and the full year on or before Feb 28, 2021.

Food and beverage manufacturer and distributor Yeo Hiap Seng reported a loss of $6.7 million for 1H20 ended June. This is a stark comparison from its earnings of $14.6 million in 1H19.

The group attributed the loss to the impact of Covid-19 lockdowns in key markets around the world and the absence of one-off gains from the sales of properties recorded in the same period last year. 

 

Excluding the one-off gain of $14.1 million realised in 1H19 on asset disposals and fair value gains on financial assets, net loss from core operations would come up to $6.7 million in 1H20 compared with net profit of $0.5 million in 1H19.

 

Revenue for the period was down 12.8% to $162.5 million from $186.4 million, driven by softness in consumer spending and disruptions in operations and sales channels due to Covid-19.

During the period under review, operations of food and beverage outlets in key markets were also significantly disrupted as governments imposed lockdowns to curb the spread of the coronavirus. The Group saw a decline in sales in most markets except Greater China.

 

As at end-June, the group&rsquo s cash and cash equivalents stood at $276.8 million.

The group did not declare any dividend for this period, as compared to a special dividend of 1 cent per share that was declared in the same period last year. 

 

BEVERAGE company Yeo Hiap Seng on Thursday said it expects to report a net loss in the first half of 2020, a significant decline from a year ago, due to the impact of the Covid-19 pandemic and lower consumer spending.

 

The net loss will be aggravated by the absence of one-off gains on asset disposals and fair-value gains on financial assets which were recorded in the same period last year, it said.

 

" The Covid-19 pandemic has and is expected to continue to adversely impact the group&rsquo s revenue and profit due to softness in consumer spending, disruptions to operations and sales channels as well as higher operating costs," it said.

 

The company said that it will continue to focus on adapting and executing commercial strategies, rolling out new products, strengthening supply-chain resilience and driving productivity.

 

It added that it is in a " robust financial position" to navigate through this crisis, although the pandemic will likely continue to cause significant market and business uncertainty in the near term.

 

The company will announce its H1 2020 unaudited financial results by Aug 15, 2020.