This article first appeared in The Edge Financial Daily, on October 6, 2015.

KUALA LUMPUR: Yee Lee Corp Bhd is expecting revenue derived from its beverage segment to double with the addition of its exclusive rights to distribute Red Bull energy drink in Malaysia, said  group chief executive officer Lim Ee Young. 

“The addition of Red Bull is expected to double the group’s beverage [segment] revenue. As for profit, we don’t know how much it will contribute yet, but it will definitely contribute positively to Yee Lee’s future profits,” he told a press conference to announce the successful transition of distribution services of Red Bull energy drinks in Malaysia yesterday.

Currently, Yee Lee distributes Spritzer and Cactus bottled water. Spritzer and Cactus brands are bottled by Spritzer Bhd. 

Yee Lee’s 32.69% associated company Spritzer raked in a total revenue of RM253.67 million for its financial year ended May 31, 2015.   

Red Bull’s exclusive agent Allexcel Trading Sdn Bhd general manager Charles Wong said the company is targeting to sell five million cartons — 24 cans per carton — of Red Bull energy drinks this year. 

Meanwhile, Yee Lee’s segment report for the cumulative six months ended June 30, 2015, showed that its associated company Spritzer contributed RM4.57 million to the former’s bottom line.  

The bottled water segment is categorised under its trading division. Within its trading division, Yee Lee also distributes other agencies’ products such as the Campbell brand and Old Town products, as well as edible oils it manufactures. 

Yee Lee’s (fundamental: 1; valuation: 1.4) trading division is the largest contributor to the group’s revenue, while its manufacturing segment contributes the largest amount of profit. 

The group manufactures cooking oil, margarine, shortening, corrugated paper cartons, crude palm oil, kernel and general line tin cans.

Based on its cumulative six-month results, its trading division contributed RM247.87 million in revenue and RM4.88 million in segment profit. 

On the other hand, its manufacturing segment raked in a revenue of RM114.49 million and RM7.5 million in segment profit.

Lim said Yee Lee has invested about RM2 million in Go-To-Market technologies, such as distribution management, sales force automation and master coverage planning system, to increase productivity and efficiency. 

Yee Lee is expecting its total investments in these Go-To-Market technologies to range from RM5 million to RM10 million in the next three years.

Yee Lee was appointed by Allexcel to distribute and sell the Red Bull Gold, Red Bull Less Sugar and Red Bull Bottle energy drinks in Malaysia for a period of five years, beginning Aug 1. 

On Yee Lee’s outlook for the second half of its financial year ending Dec 31, 2015, Lim said: “We are cautiously optimistic about the results for the second half.”

“We distribute and sell many consumer goods. I think we can match the figures we achieved last year. The distribution of Red Bull energy drinks will add value to what we are doing,” Lim added. 

Yee Lee’s net profit for the cumulative six months ended June 30 fell to RM12.48 million from RM16.43 million a year ago. This was despite a 3.9% increase in revenue to RM363.33 million from 349.85 million a year ago.