Eu Yan Sang profit climbs 48% to S$19.3 million

The global healthcare company with a strong foundation in Traditional Chinese Medicine (TCM) increased retail sales in Hong Kong, Malaysia and Singapore.

Eu Yan Sang International Ltd EYS), on Thursday reported an increase of 48% in net profit to S$19.3 million for its financial year ending 30 June 2010 (FY2010) on the back of a tenth year of record revenue of S$244.7 million since its listing, a report from EYS said.

EYS’s higher revenue was said to be attributed to the increase in retail sales in all its three core markets, namely Hong Kong, Malaysia and Singapore. The report found out that lower operating costs and better same store sales contributed to a better operating profit before tax while higher net profit was further boosted by S$1.5 million from a fair value gain on property, plant and equipment and a fair value gain on investment properties.

Buoyed by a strong cash generated from operations of S$31.3 million, the healthcare group ended FY2010 with cash-on-hand of S$35.6 million compared to S$25.4 million the year before.

Mr Richard Eu, Group CEO remarked, “With a good set of results for FY2010, we are able to propose a dividend of 2.5 cents per share and a 1-for-5 bonus shares issue to reward shareholders.”

Meanwhile, a proposed dividend of 2.5 cents (FY09: 2.2 cents), comprising a final dividend of 1 cent and a special dividend of 1.5 cents, will be subject to the approval of shareholders during the upcoming Annual General Meeting.

Operations Review

EYS reported that retail-TCM recorded a surge of 13% in revenue to S$197.6 million for the financial year 2010, demonstrating the increasing preference of the Group’s product from consumers.

However, wholesale-TCM revenue dipped 5% in revenue due to lower exports to China owing to a license renewal issue. Sales of the Group’s top five selling products, namely Bottled Bird’s Nest, Bo Ying Compound, Bak Foong Pills, Lingzhi Cracked Spores Capsules and Essence of Chicken, continued to show steady growth. Clinic-TCM revenue maintained at S$14.3 million.

EYS said Malaysia continued its surge in revenue, recording a 19% increase while Hong Kong remained the Group’s largest market, posting 11% growth.

Singapore, on the other hand, recorded 8% growth in revenue. The impressive performance by Malaysia was contributed partly by the excellent hamper sales and the improving performance from the Group’s new sub-brands such as Yen and HoneyMart, said the EYS financial report.

As at 30 June 2010, the group had 159 Eu Yan Sang retail stores, with a net increase of 5 outlets from the previous year, and 6 sub-brand outlets, giving a total retail presence of 165 stores. It has also opened a second Integrative Medical Centre in Hong Kong with a total number of clinics of 21 as at 30 June 2010.

“We will continue our two-prong approach to grow our company. Through our branding efforts, we can widen our reach to new consumer segments. Through research and development, we will have a pipeline to introduce new TCM and health food products and services,” said Mr Eu.