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2017 Interim Results

Revenue up by 11.3% to HK$6.3 billion

Stable Q2 gross profit margin quarter on quarter despite pulp price hike

Revenue from Personal Care reached HK$1.2 billion 

Launched tissue in Malaysia

 

(19 July 2017 – Hong Kong) Vinda International Holdings Limited (stock code: 3331) announced today its unaudited interim results for the six months ended 30 June 2017.

                                                                                                                                                  

2017 Interim Results Highlights:

 

Solid revenue growth despite challenging competitive environment

·      Total revenue grew by 11.3% to HK$6.3 billion, representing 6.8% of organic growth1

·     Organic growth1 of mainland China in Q2 was close to double-digit, higher than that in Q1

 

Stable Q2 gross profit margin quarter on quarter despite pulp price hike

·     Q2 gross profit margin was 30.6%, 0.2 pps higher than that in Q1

 

Strong EBITDA margin

·     EBITDA grew by 7.5% and EBITDA margin stood at 14.2%, reflecting strong cash generation from our business

 

Optimised Tissue product portfolio and launched Tissue in Malaysia

·      Revenue from Tissue segment was HK$5.1 billion, representing 7.2% of organic growth1

·      Recorded strong growth in sales of softpack and wet wipes

·      Launched tissue in Malaysia, with first shipment in May

 

Increased revenue contribution from Personal Care segment

·      Revenue from Personal Care segment reached HK$1.2 billion, accounting for 20% of the Group’s total revenue (1H2016: 13%)

·      Incontinence care and feminine care delivered good revenue growth

 

Maintained leading market position in E-commerce

·      Revenue growth from E-commerce stood out among various sales channels, accounting for 20% of the Group’s total revenue

·      The traditional distributors, key account managed supermarkets and hypermarkets, B2B corporate customers accounted for 40%, 26% and 14% respectively

 

Decrease in gearing level and effective tax rate

·      Net gearing ratio2 was 50% (year end of 2016: 59%). The effective tax rate was 21.3%, down by 1.0 pps was mainly attributable to additional deduction of 50% of qualified research and development expenses from  two subsidiaries

 

Production capacity

·      An additional capacity of 60,000 tons in Zhejiang factory has started operation since July, bringing the total to 1.1 million tons by the end of the year

·      Our tenth factory in China in Yangjiang, Guangdong, is expected to be completed in 2018. The factory will have initial annual designed capacity of 60,000 tons in the first year of its operation, and its production capacity will possibly expand in the future to meet the strong demand in South China.

 

Proposed interim dividend

·      An interim dividend of 5.0 HK cents per share is proposed (1H2016: 5.0 HK cents)

 

Mr. Christoph Michalski, CEO said, “In the first half of 2017, we launched high value-added embossed tissue products, promoted our international personal care brands, increased the penetration of both our online and offline sales channels and enhanced our operational efficiency. We also launched consumer tissue in Malaysia, one of our strongest markets in Southeast Asia.

 

We are cautiously optimistic about the second half of the year. We will focus on innovation, brand development, product portfolio management, channel expansion, cost control and operational efficiency improvement. We will grow our business in the following order of priorities: 1) To drive Tissue business in China 2) To broaden the presence of Personal Care business in China 3) To drive the growth of Personal Care business in Asia and roll out Tissue business to the region 4) To develop B2B business”

 

Mr. Li Chao Wang, Chairman said, “July 2017 marks the tenth anniversary of the listing of the Group on Hong Kong’s stock market. As we steer ahead to become a leading hygiene company in Asia, we would like to take this opportunity to extend our gratitude to our investors for their confidence in Vinda over the years, and we will make every effort to attain good results.”

 

 

1 Since 1 April 2016, the completion date of the acquisition of SCA Asia business in Malaysia, Taiwan and Korea by the Group, the financial figures of SCA Asia business have been consolidated into the financial results of the Group. Therefore, with respect to the calculation of the organic revenue growth for the first half of 2017, the data recorded between January and March excluded the acquired Asia business in Malaysia, Taiwan and Korea, as well as the exchange rate effects; whereas for the calculation of the organic revenue growth between April and June, only the exchange rate effects were excluded (i.e. for the calculation of the organic revenue growth in the first quarter of 2017, the acquired Asia business in Malaysia, Taiwan and Korea, as well as the exchange rate effects were excluded; for the calculation of the organic revenue growth in the second quarter of 2017, only the exchange rate effects were excluded).

 

2 Net gearing ratio: Total borrowings less bank balances and cash and restricted deposits divided by total shareholders’ equity

 

 

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