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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Good afternoon, ladies and gentlemen. Thank you for joining us today for Vitasoy Interim Results Briefing for fiscal year 2022 and 2023.
Before we start, I would like to introduce you to the senior management of Vitasoy Group. Sitting in the middle of the head table, we have Mr. Winston Lo, Executive Chairman of Vitasoy Group. On his right-hand side, we have Mr. Roberto Guidetti, our Group Chief Executive Officer. On the left-hand side of Mr. Lo, we have Ms. Ian Ng, Group Chief Financial Officer.
In the following presentation, we will first have Ian to provide us with a review on the company's financial performance, followed by Roberto's presentations on the business review in different markets and outlook. We will then have a Q&A session.
Now, let's invite Ian to speak to us. Ian, please.
Good afternoon, ladies and gentlemen. Welcome to our interim results announcement briefing. Before we start our presentation, I would like to draw your attention regarding the forward-looking statements in this presentation.
I would like to remind you about the positive profit announcement we issued on 26th of October. The increase is primarily attributable to a significant increase in net profit from the group's Mainland China business in the current period. The Mainland China business has delivered encouraging revenue growth and achieved solid profitability. Furthermore, the company received HKD 59 million of COVID-19-related government subsidies in the current period as compared to $4 million in the prior period.
With strong sales recovery in Mainland China, we closed the first half of the fiscal year with revenue at HKD 3.6 billion, surpassing last year by 1%. Net of foreign exchange impact, the growth was 4%. Gross margin maintained at 48% due to higher sales volume and lower trade promotional expenses, offset by sales mix and higher raw material costs. EBITDA rose 48% to $473 million. And profits to shareholders was $142 million, which was in line with the positive profit alert.
The financial result was the consequence of improved sales, higher pandemic-related subsidies, reface of advertising and promotion activities, and the control of other operating expenses.
COVID-19-related government subsidies increased from last year's $4 million to $59 million this year, primarily from the Hong Kong SAR government. Excluding these subsidies, gross profit was on par with last year, while operating profit and profits to shareholders were $153 million and $83 million, respectively, significantly ahead of last year.
Basic earnings per share increased to $0.133. In view of the group's improved financial performance, the Board of Directors has declared an interim dividend of $0.013 per ordinary share for the 6 months ended 30th September 2022.
Next, let's move to CapEx. Capital expenditure for this year was reduced to $77 million, in line with our plan. We continue to invest in new production lines and equipment upgrades to support business growth and enhance operation efficiency.
The financial position of the group remains strong. As of 30th September 2022, our cash and bank deposit was $898 million. Bank borrowing was $438 million. Gearing ratio for the group remains at a healthy level of 26%. The group's return on capital employed, ROCE, was 13% compared with last year's 8%.
This ends the first section of the presentation. Now I would like to invite our group CEO, Mr. Roberto Guidetti, to share with you the by-market review and the business outlook of the group. Thank you.
Thank you, Ian, and good afternoon. Let me now share with you the review of our business overall and by geography. First of all, this semester, the Vitasoy Group has delivered revenue growth and has done so profitably. Whilst the revenue growth is only plus 1% in Hong Kong dollars due to currency depreciation, when calculated on a constant currency basis, the growth will be 4%. Group operating profit was HKD 220 million, equivalent to 6% of revenues. We have registered a substantial growth of 332% in terms of profit attributable to shareholders at HKD 142 million.
The growth is broad-based across both our main brands, VITASOY and VITA, and across markets. Mainland China grew revenue plus 4% in renminbi, with 6% operating profit margin. All other markets also grew, except Singapore where we are evolving our business model. Our core portfolio is the key engine of growth, complemented by on-trend innovation. At the same time, we are continuing to strengthen our organizational talent and processes.
Our goal for the second half is to sustain revenue growth while securing profitability on a yearly basis. In the context of lower seasonality in the winter period, Mainland China is now growing steadily and profitably versus the same period last year. This is due to gradual but consistent improvements in our in-store execution and geographical expansion, and is complemented by on-trend innovations like VitaOat and Vita Sparkling Tea, adding scale to our core VITASOY and VITA brands.
We expect Hong Kong SAR, Australia and Philippines to continue to grow, while we expect that Singapore will continue to scale up beverages but encounter profit challenges in the short term in the context of the tofu category continuing commoditization. Overall, we stay confident in our long-term trajectory as the plant-based movement goes mainstream.
As just mentioned, the first semester showed substantial top line performance improvement with the only exception of Singapore. As a result, Mainland China remained the biggest market and accounted for 61% of the group revenue. Hong Kong SAR increased its revenue percentage of the group to 30%, while Australia and New Zealand maintained their level at 8%. The higher half year group operating profit was evident across our major markets despite headwinds in rising commodity costs, supply chain challenges and other macroeconomic pressures.
Let's now move to our review by market, starting with our biggest, China. China total revenue was HKD 3.3 billion, an increase of 1% compared with last year. Operating profit was HKD 285 million, with Mainland China accounting for most of the growth, and government subsidies partially supporting Hong Kong SAR. In China, our Mainland business has delivered profitable growth, as we discussed.
Over the last year, we have strengthened our leadership team with the addition of new leaders. We have integrated functions across Mainland and Hong Kong to advance a united, consistent strategy and focus, stronger synergies and productivity. These have now yielded stronger ability to drive our core portfolio for profitable growth on both VITASOY and VITA.
The team has applied their discipline to execute and track a new picture of success for in-store execution to deliver more volume per store. In addition, on our core brands, we have implemented food pairing and promotions to stimulate various consumption occasions across different channels.
All the above was driven by a new advertising campaign on both VITASOY and VITA that we would like to show you here. So if we can please show you the VITASOY execution and the VITA Tea execution for Mainland China. Thank you.
[Presentation]
The growth of our core business has been complemented by on-trend innovation. This has taken the form of new exciting platforms across both VITASOY and VITA.
On VITASOY, we've continued to drive VitaOat, which has grown to be among the top volume leaders in the Oat segment in Mainland China. We have recently added a new tasty variants to its original product, specifically Matcha Red Bean and Chocolate, which we believe will continue to accelerate this new platform, particularly among trendy young shoppers interested in a healthy, sustainable diet and lifestyle.
On VITA Tea, we have consistently expanded the Vita Sparkling Tea platform that we launched last year, adding also new exciting variants in PET for the on-the-go occasion. We are confident the Sparkling Tea segment will be able to scale upon continuous awareness building and trial of its unique product experience.
Let me now show you the campaign for VitaOat and the campaign of Vita Sparkling Tea in succession. Thank you.
[Presentation]
So going forward, we will stay focused on quality execution of our core portfolio, complemented by driving these new platforms, so VitaOat and Vita Sparking Tea. We will also continue to accelerate geographical availability of our portfolio across new selective locations.
In Hong Kong SAR, we grew revenue strongly by sustaining equity campaigns and activations in store on both brands. At the same time, new and successful innovation is critical in such a high per capita development market. To this purpose, we've had new items driving growth on both brands.
On VITASOY, we accelerated its leading position in plant milk by a new line extension in Fresh, Vitasoy Plant+, a calcium-fortified, low-sugar, tasty platform, consisting of oat milk and almond milk, now sold across all Hong Kong supermarkets with initial encouraging results. And this is the product that I have here in front of me.
We also extended our Vitasoy Calci-Plus line with the addition of a new Protein Plus offering. On VITA Tea, we continue to grow in the Fresh segment, adding a new tasty peach variant to our VITA Tea Fresh line, which has received excellent shopper feedback also because of its relevant seasonal advertising campaign. Now we didn't have a chance to show you this in the previous announcement, and so we are going to show it to you now. We can show the Vita Fresh Tea campaign, please.
[Presentation]
Let's now move to our overseas business, starting from Australia and New Zealand. Now for Australia and New Zealand, we have delivered a strong first half. This was due to broad-based growth across our portfolio, strong acceleration of our Vitasoy Oatmeal platform, where we have achieved the #1 segment leadership, all driven by our successful, let's grow a better world campaign. Here is a TVC for it, so you can basically see what we are having in Australia. Thank you.
[Presentation]
So this is our mainstream campaign. But then importantly, in the second quarter, we have also introduced a completely new breakthrough soy-based yogurt in Australia, delivering the Greek experience with high calcium, high protein and great taste. And so far, we have gathered very encouraging support, very encouraging shopper feedback, with a spontaneous community nutritionists and dietitians endorsement. And we are driving its awareness via specific execution of our Vitasoy Australia campaign that is focusing specifically on yogurt. And we can show it to you now. Thank you.
[Presentation]
So that was Australia and New Zealand, very exciting. Singapore. Let me close this segment review by covering Southeast Asia market, Singapore first and Philippines next.
The Singapore -- in Singapore, we have a primarily tofu business, and the Singapore tofu category is experiencing evermore intense value erosion and commoditization. This will affect our business in the short term as we evolve to strip costs and accelerate scale up of local beverages. Encouragingly, our Vitasoy Plant+ Fresh platform comprising soymilk, almond milk and oat milk is being established as the only multi-plant milk fresh platform in the Singapore market to drive more revenue in this relevant segment.
And let me close the by-market review with a brief update on our business in the Philippines. We are very encouraged by the scale of acceleration of Vitasoy in the Philippines. The post-pandemic recovery has enabled restoration of the on-the-go consumption occasion, thus enhancing the appeal of our locally sourced single-serve platform. In addition, we continue to drive our multi-serve offering, adding almond milk and oat milk to our existing soymilk product to broaden brand relevance and increase per capita consumption. And here, we have one of the executions we are using in the Philippines that is advertising Vitasoy Oat Milk, please.
[Presentation]
So just a message in closing before final summary. I also wanted to inform you that we have redesigned our corporate website to really even better convey our purpose, values, behaviors, portfolio offering, and all the important information on plant-based nutrition, sustainability, ESG and investor-relevant communication. So the new corporate website will be operational as of December 1, and I am encouraging you to browse it. I think you'll find it very helpful, December 1.
In summary, after a profitable growth in the first half, our goal for the second half of the fiscal year is to sustain revenue growth while securing profitability on a yearly basis in the context of lower seasonality in the winter period. Mainland China is now growing steadily and profitably versus the same period last year. This is due to gradual but consistent improvements in our in-store execution and geographical expansion, and is complemented by on-trend innovations by VitaOat and Vita Sparking Tea, adding scale to our core VITASOY and VITA brands.
We expect Hong Kong SAR, Australia and the Philippines to continue to grow. Whilst we expect that Singapore will continue to scale our beverages but encounter profit challenges in the short term in the context of the Tofu category continuing commoditization. Overall, we stay confident in our long-term growth trajectory as the plant-based movement goes ever more mainstream.
This ends this section of the presentation, and we can now open for questions. Thank you.