Soya bean milk maker Vitasoy International Holdings saw attributable profit decline 25.74 per cent to $50.47 million in the six months to September 30, brought down by a $18 million start-up loss at a United States-based factory. Chairman Winston Lo Yau-lai yesterday said the factory in Massachusetts experienced unexpected operational problems which generated larger-than-estimated start-up losses and disrupted sales of beancurd products. He said the company's key market - Hong Kong - performed the best in profit terms during the period. Operating losses were recorded in the mainland and US, however. 'We believe our performance in the mainland and the US will turn around in the second-half because the losses arose largely from the operating losses of our new factories in Massachusetts and Shanghai,' Mr Lo said. Operating profit dropped nearly 20 per cent to $66.38 million on $963.23 million turnover, which was 10.15 per cent up year on year. The interim dividend remained unchanged at 3.6 cents. Earnings per share fell 26.42 per cent to 7.8 cents. Mr Lo said production at the US factory was disrupted as the company was 'too eager' to put the newly-installed production lines and fledgling workers on track. 'We were too eager to put everything on the right track as soon as we could because we saw strong demand for beancurd products,' he said. The US market generated about 20 per cent of the company's sales. Executive director John Lau Shek-hung said Hong Kong accounted for almost 70 per cent of the company's sales in the first-half, with operating profit growing about 8 per cent. He said fierce competition prevailed, which restrained the company from raising wholesale prices. 'We have turned to controlling production costs, such as by sourcing cheaper raw materials,' he said. The mainland, which accounted for 6 per cent of the company's turnover, lost $2 million, he said.
