Vitasoy International Holdings expects to have moved back into the black in the financial year to 31 March.

The Hong Kong-listed plant-based drinks and desserts group is forecasting a profit of between HK$35m ($4.5m) and HK$55m for the year.

In its guidance, the company stated the predicted profit will come from “a significant increase” in profit from its business in mainland China.

Last year, Vitasoy reported an attributable loss of HK$159m. At the time, it pointed to the Covid-19 pandemic and the impact that had on the performance of its operations in mainland China. The group’s revenues dropped 14% to HK$6.5bn in 2022.

Vitasoy said on Friday (19 May) its mainland China business has “stabilised and achieved solid profitability through effective trade spend management and cost rationalisations”.

Vitasoy also wrote that its business in Hong Kong has “sustained growth” and received Covid-19-related government subsidies of HK$60m versus HK$17m in 2022.

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By GlobalData

In the plant-based food and beverage company’s results for the six-month period until 30 September 2022, it generated gross profit of HK$1.74bn and EBITDA of HK$473m.

Vitasoy said its move into profitability was partially offset by the HK$43m in transaction costs it incurred after the acquisition of the remaining 49% equity interest in Vitasoy Australia from Bega Cheese in January.

Australia-based Bega Cheese finally accepted a valuation for its stake in Vitasoy after claiming the valuation of A$27.5m (then $17.5m) in November was “significantly” undervalued. Vitasoy had triggered a so-called put option clause to acquire the Australian group’s share in the project.