Eu Yan Sang’s FY2009 net profit soars 165% to S$13.1 million

• Revenue up 7% to S$222.5 million; ninth consecutive year of record sales since listing
• Record operating profit of S$20.3 million
• Net cash from operations surges 324% to S$30.8 million
• Proposes dividend of 2.2 cents per share, up 10% from FY2008

Singapore, 27th Aug 2009 – SGX mainboard-listed Eu Yan Sang International Ltd (“EYS”, “the Group” or “余仁生国际企业”), a progressive, global healthcare company with core businesses in Traditional Chinese Medicine (TCM) and integrative healthcare, recorded a surge of 165% in net profit to S$13.1 million for FY2009 ended 30 June 2009 on the back of a ninth year of record revenue of S$222.5 million since its listing.

^: Calculated on fully diluted basis.
NM: Not meaningful

The higher net profit came as a result of an absence of losses on discontinued operations and an increase of 7% in the Group’s revenue to S$222.5 million, its ninth consecutive year-on-year growth since the Group’s listing in 2000.

Commenting on the good performance, Mr Richard Eu (余义明), Group CEO remarked, “Despite the worst recession in recent decades, we are delighted to announce a record set of results in terms of revenue, operating profit and cash flow. This achievement makes our 130th anniversary more significant.”

Better management of inventory has helped the Group to improve its net cash flow from operating activities by 324% from S$7.3 million in FY2008 to S$30.8 million in FY2009.

With this good set of results, the Group proposed a final dividend of 1 cent and a special dividend of 1.2 cents for a total of 2.2 cents per share to reward shareholders, an increase of 10% over FY2008, subject to the approval of shareholders to be obtained during the coming Annual General Meeting.

Operations Review

Retail remained the largest business segment and surged 8% in revenue to S$174.1 million for FY2009. Despite the recession, the Group’s retail segment remained strong, demonstrating resilience in the Group’s business model and established brand. Bo Ying Compound, Bottled Bird’s Nest and Bak Foong Pills, the Group’s flagship products, continued to be the top three selling products. Wholesale experienced a dip of 1% in revenue due to the delay in exports to China owing to a license renewal issue which was resolved only in 4QFY2009. Clinic revenue gained 5% to S$14.3 million, demonstrating increasing acceptance of the Group’s clinic services.

In geographical and local currency terms, Malaysia surged 19% while Singapore and Hong Kong posted moderate growth of 4% and 1% respectively. The impressive performance by Malaysia was a result of focused marketing on flagship products and a wider product range. Hong Kong’s moderate increase should be viewed in the context of a 50% decrease in exports to China.

The Group expanded its retail network in FY2009 with a net increase of 10 outlets to 154. In FY2009, the Group also opened an Integrative Medical Centre in Hong Kong, combining both Western medical and TCM consultation.

Outlook

Although the credit crunch experienced in the last 2 quarters has eased, economic activities and retail statistics in the Group’s core markets remain weak. Mr Eu added, “With our strong performance despite challenging times, we will continue to seek growth opportunities balanced with prudent management.”

Barring unforeseen circumstances, the Group expects to be profitable again in FY2010.

About Eu Yan Sang International Limited (SGX:EYSI)

Listed on the Singapore Exchange, Eu Yan Sang International Limited (Eu Yan Sang) is a progressive, global healthcare company with its core focus in Traditional Chinese Medicine (TCM) and integrative healthcare. It is one of the largest TCM groups in South East Asia and a leader in adopting a scientific approach in the production of TCM products.

The Group has come a long way from its humble beginnings offering TCM remedies to tin mine coolies in Gopeng, Perak, Malaysia 130 years ago. Today, Eu Yan Sang is a household name in Asia with an unrivalled reputation as the leader in the TCM industry.

Eu Yan Sang’s ability to control the total supply chain – from the sourcing of its raw materials to the production and distribution of its products and the provision of treatments gives the Group an excellent competitive edge in the industry.

To give an added assurance to consumers, the Group developed the world’s first certification standard for TCM herbs, called the “Eu Yan Sang Good Agronomic Practices for Herbs (EYSGAP-Herbs) Certification”. This certification ensures world-leading standards are maintained at all stages of growing, processing and retailing of TCM herbs.

Eu Yan Sang is also developing a world first integrated online portal to keep track of TCM herbs throughout the whole value chain, known as “integrated Good Agronomic Practice for Traditional Chinese Medicine Electronic System” (iGATES).

Apart from retailing fine quality Chinese herbs and Chinese Proprietary Medicines, Eu Yan Sang also retails health foods and supplements. Currently, the Group offers more than 300 products under the Eu Yan Sang brand name and over 1,000 different types of Chinese herbs and other medicinal products. Manufacturing activities are carried out in two of its GMP-certified (Good Manufacturing Practice) factories located in Hong Kong and Malaysia.

As of 30 June 2009, Eu Yan Sang has an extensive distribution network comprising more than 150 retail outlets in China, Hong Kong, Macau, Malaysia and Singapore. Its products are available in drugstores, pharmacies, medical halls, supermarkets, convenience stores, hospitals, health clubs and spas worldwide. Its online store at www.euyansang.com offers global customers the ease and convenience of shopping online. The Group also operates a chain of 20 TCM Clinics in Singapore and Malaysia, and one Integrative Medical Centre in Hong Kong.

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