Eu Yan Sang International reports sharp rise in Q1 profit on strong revenue growth

Eu Yan Sang International has a marked improvement in its first quarter net profit, rising to $1.4 million from $341,000 previously.

Revenue for the three months ended Sept 30 climbed by 13 per cent to $79.5 million, largely attributed to the good performance in Hong Kong and Australia.

Wholesale revenue increased 15 per cent to $14.0 million, largely driven by strong wholesale performance in Hong Kong and Macau.

Clinic revenue rose by 6 per cent to $4.5 million.

With the group's gross margin maintaining at 51 per cent, gross profit rose in line with revenue growth.

Meanwhile, operating expenses increased less proportionately than revenue growth. Thus, operating profit improved by 48 per cent.

This also translated to higher net profit.

Earnings per share jumped to 0.32 cent from 0.08 cent previously while net asset value per share eased to 33.5 cents compared to 33.6 cents as at June 30.

Eu Yan Sang's total retail outlets stand at 299, comprising 250 company-operated outlets and 49 franchisee outlets.

The number of clinics and integrative medical centres remained unchanged at 29 and two respectively.

Looking ahead, the group expects rising operating costs, especially retail rents, to pose a challenge.

It has taken steps to manage its costs and expects its core business to continue to be profitable and cash flow positive.

It will continue to pursue other strategic opportunities for growth in new lines of business that complement its existing core.