2018 Interim Results Highlights

 Revenue rose by 16.3% to HK$7.3 billion

Net profit up by 30.1% to HK$417 million


Increasing gross margin, operating margin & net margin

Increased interim dividend to 6 HK cents per share

(19 July 2018 – Hong Kong) Vinda International Holdings Limited (stock code: 3331) announced today its unaudited interim results for the six months ended 30 June 2018.

2018 Interim Results Highlights:

–       Increase in interim dividend

·    An interim dividend of 6 HK cents per share is proposed (1H2017: 5 HK cents)

–        Double-digit growth in revenue & profits      

·    Total revenue grew by 16.3% to HK$7.3 billion, driven by strong sales in all regions

·    Gross profit rose by 13.1% to HK$2.2 billion

·    EBITDA grew by 25.1% to HK$1.1 billion

·    Operating profit grew by 26.5% to HK$643 million

·    Net profit grew by 30.1% to HK$417 million 

–       Total selling, general & administrative expenses (“SG&A”) ratio dropped by 1.8 percentage point (“ppts”) through active cost saving initiatives and operation efficiency improvement      

–        Continuous improvement in profit margins due to effective price increase initiatives, mix enhancement and strict cost control measures

·    Gross margin was 29.7%, 0.8 ppt higher than that in 2H2017. Gross margin in 2018Q2 was 31.0%, 2.5 ppts higher than that in 2018Q1

·    Operating margin was 8.8%, up by 0.7 ppt yoy

·    Net margin was 5.7%, up by 0.6 ppt yoy 

        Double-digit revenue growth in E-commerce and B2B

·    Revenue from E-commerce and B2B accounted for 22% and 15% of total revenue respectively

        Continued optimizing Tissue product portfolio and launched new product series

·    Revenue from Tissue business amounted to HK$5.9 billion with a growth rate of 16.9%, accounting for 81% of the Group’s total revenue

·    Satisfactory sales growth in softpack, kitchen towel and wet wipes

·    Tissue portfolio optimised by launching several product series, including Vinda Cotton Care, Vinda Deluxe 4D-DécoTM Color and Tempo Toilet Wipe

        Increased revenue growth in Personal Care segment

·    Revenue from Personal Care Business reached HK$1.4 billion with a growth rate of 13.9%, accounting for 19% of the Group’s total revenue

·    Both incontinence and feminine business extended its presence on e-commerce platforms

        Production capacity expansion to support growth

·    Annual designed production capacity for tissue paper reached 1,100,000 tons as at 30 June 2018

·    Adding 60,000 tons of capacity in 2018Q3 and adding another 120,000 tons in 2018Q4 / 2019Q1, at the latest

Mr. Christoph Michalski, CEOsaid, “We successfully grew in both sales and margins despite the significant increase in wood pulp cost. We will continue to focus on the following measures to seize growth opportunities and protect our profitability: Firstly, we will differentiate ourselves in all categories through innovation and a value-added portfolio mix. Secondly, we will closely monitor the market dynamics to manage our product price.   

Thirdly, we will keep up our effort in reducing the cost across all functions and projects. Fourthly, we will continue to strengthen our production and operational efficiency, while keeping our production capacity expansion on track for sustainable growth. Lastly, we will maintain a healthy financial position and good management of cash generation and effective financing.”

Mr. Li Chao Wang, Chairmansaid, “We are pleased to present a growing interim results despite all the challenges in the first half. 2018 is a year about growth & efficiency for Vinda. We are confident to come up with solutions to deal with the upcoming challenges and to strive for a good balance between business growth and profitability.”