Yeo Hiap Seng sinks into red for H1, cites Covid-19 impact

BEVERAGE maker Yeo Hiap Seng (YHS) posted a net loss of S$6.73 million for the six months ended June, reversing a net profit of S$14.6 million a year ago. The heritage brand cited the Covid-19 pandemic as the key reason for the red ink.

Revenue for H1 fell 12.8 per cent to $162.5 million, hurt by the soft consumer spending and disruptions in operations and sales channels arising from Covid-19 restrictions. Its operations of food and beverage outlets were also hit by government-imposed lockdowns. Sales fell in most markets except Greater China, YHS said.

Besides lower sales, the plunge in the bottom line was also accentuated by the absence of S$14.1 million in one-off gains last year, arising from asset disposals and fair value gains on financial assets. Without those gains, the net profit in H1 last year stood at about S$500,000.

YHS said that its balance sheet is robust, with cash of S$276.8 million and no bank borrowings as at end-June. Its liabilities comprise mainly trade and other payables and lease liabilities.

Chief executive Samuel Koh noted that on the positive side, the rise in sales of the evergreen food portfolio grew and helped cushion the decline in sales of beverages.

"Moreover, sales have picked up in markets that have partially lifted lockdown measures, and we believe this momentum will improve if and when more countries open up their economies and ease restrictions."

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He added: "As we navigate this unprecedented crisis, we have to remain focused on improving our commercial and supply fundamentals while driving productivity and mitigating the negative impact of Covid-19."

Mr Koh took over as chief executive from Melvin Teo in March, and has embarked on leadership renewals in key markets and key functions, making changes to management of sales channels, improving supply chain resilience and driving productivity.

Shares of YHS closed flat at S$0.82 on Friday ahead of the results.