Two prominent beer companies, Sabeco and Habeco, have experienced mixed financial results. The Quarter 2/2024 Consolidated Financial Statements of Vietnam JSC Beer – Alcohol – Beverage Saigon (HOSE: SAB) showed a net profit of over VND 1,248 billion, the highest in seven quarters and an increase of 8% compared to the same period last year. In the first six months, the net profit was nearly VND 2,246 billion, an increase of 6%, and the company has achieved 52% of its annual plan.
| Sabeco records highest profit in almost two years |
The company attributed its success to significant cost-cutting measures, which improved business efficiency despite the impact of Decree 100 and intense competition on consumer spending and revenue.
Sabeco’s subsidiaries, including CTCP Bia Sài Gòn – Miền Trung (HOSE: SMB), CTCP Bia Sài Gòn – Quảng Ngãi (UPCoM: BSQ), and CTCP Bia Sài Gòn – Sông Lam (UPCoM: BSL), also reported profit growth in Quarter 2. BSL led the way with a 60% increase in net profit to VND 12 billion, followed by BSQ with a 19% rise to over VND 35 billion and SMB with a 7% increase to more than VND 60 billion.
On the other hand, CTCP Bia Sài Gòn – Miền Tây (UPCoM: WSB) witnessed a 19% decline in net profit to over VND 22 billion. Additionally, CTCP Bia Sài Gòn – Phú Thọ (UPCoM: BSP), an associate of Sabeco, recorded a net profit of less than VND 4 billion, a 39% decrease from the previous year, due to reduced production and sales.
In Northern Vietnam, Total JSC Beer – Alcohol – Beverage Hanoi (Habeco, HOSE: BHN) reported a net profit of nearly VND 154 billion in Quarter 2, a 13% decrease from the same period last year. However, this result is an improvement from the loss of over VND 5 billion in Quarter 1. In the first six months, the net profit was nearly VND 149 billion, a 21% decrease, and the company has achieved 75% of its annual plan.
Habeco’s subsidiaries showed signs of recovery in Quarter 2, with remarkable profit growth. The standout performer was CTCP Bia Hà Nội – Thanh Hóa (HNX: THB), which recorded a 214% increase in net profit to nearly VND 4 billion. This impressive growth was mainly due to organizational restructuring and process improvements, resulting in cost savings. CTCP Thương mại Bia Hà Nội (HNX: HAT) and CTCP Bia Hà Nội – Hải Dương (HNX: HAD) also contributed to the positive trend, with net profits of nearly VND 5 billion and over VND 12 billion, respectively, representing increases of 33% and 8% compared to the previous year.
In the beer industry, CTCP Bia Hà Nội – Quảng Bình (UPCoM: BQB) was the only company to turn losses into profits in Quarter 2, recording a net profit of VND 1.6 billion compared to a loss of over VND 900 million in the same period last year. This improvement was driven by a significant increase in revenue and a reduction in various expenses.
Investing in Advertising and Promotions
Overall, beer companies acknowledge that Decree 100, which regulates alcohol consumption for drivers, remains a significant hurdle for the industry’s recovery this year. To maintain their market position, some businesses have had to increase expenses to enhance product quality and improve packaging designs. In the first six months, Sabeco spent VND 1,031 billion on advertising and promotions, averaging nearly VND 5.7 billion per day. Habeco, on the other hand, invested over VND 270 billion in advertising, promotions, and support, translating to a daily expenditure of VND 1.5 billion on these activities.
Additionally, high and unpredictable production and operating costs (including packaging, raw materials, and transportation) continue to impact the profits of companies in the beer industry, and these costs are expected to rise further.
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According to Sabeco, in the first quarter, the demand for beer saw an improvement despite the strict enforcement of Decree 100. In addition to this, the favorable effects of the uplifts in prices last year supported the revenue growth.
