The Sweet Treats Showdown: A Look at Confectionery Companies’ Profits Ahead of the Mid-Autumn Festival

In the first half of 2024, many confectionery businesses reported lackluster financial results, while some showed promising growth. As the Mid-Autumn Festival approaches, companies need to devise appropriate business strategies to improve their profit margins.

Profits Take a Significant Hit

According to Kido Group’s consolidated financial statement for Q2 2024, their revenue reached VND 2,507 billion, a decrease of 13% compared to the same period last year. This decline can be attributed to a reduction in revenue from both the food and beverage segment and the real estate segment.

Kido’s financial income also took a steep drop, falling from VND 1,120 billion to VND 46 billion, a decrease of nearly 96%.

Despite efforts to reduce other expenses, Kido’s after-tax profit for Q2 2024 was only VND 11 billion, a staggering 99% decrease compared to the previous year.

Explaining the profit discrepancy, Kido attributed it to the restructuring of the Group’s business model and market fluctuations that impacted the company.

For the first six months of 2024, Kido’s revenue stood at VND 3,532 billion, and profit was VND 32 billion, representing a 19% and 94.2% decrease, respectively, compared to the same period last year.

For the full year 2024, KDC set a business plan targeting VND 13,000 billion in revenue and VND 800 billion in pre-tax profit. However, by the end of the first half, KIDO had only achieved 27% of its revenue target and 6% of its profit target.

Similarly, HHC also experienced a gloomy business situation. In Q2 2024, their revenue reached VND 136 billion, a 12% decrease compared to the same period last year. After deducting the cost of goods sold, gross profit decreased by 8% to nearly VND 28 billion.

Notably, thanks to a significant increase in interest income and income from lending activities, HHC’s financial income surged to VND 35 billion, nearly three times higher than the previous year.

However, their financial expenses increased by 3.8 times to VND 27 billion, and selling expenses also rose by 53% to VND 23 billion. On a positive note, administrative expenses were reduced to over VND 9 billion.

As a result of these varying expenses, HHC’s after-tax profit stood at VND 3 billion, only 45% of the previous year’s figure.

For the first six months of the year, the company recorded a 12% decrease in revenue, amounting to VND 342 billion. However, their after-tax profit increased by 41% to VND 24 billion compared to the same period last year.

Benefiting from Cost-cutting Measures

Bibica, one of the few listed confectionery companies with positive financial results, stood out in the industry. In Q2 2024, Bibica achieved a revenue of VND 260 billion, marking a 23% increase. Their gross profit reached VND 73.5 billion, a remarkable 1.7 times higher than the previous year.

During this period, financial expenses increased slightly to over VND 13 billion, while financial expenses decreased to over VND 3 billion. However, selling expenses surged by 76% to more than VND 54 billion, and administrative expenses also rose slightly to nearly VND 19 billion.

Despite the significant increase in expenses, Bibica reported a net profit of VND 8.6 billion, a substantial improvement compared to the previous year’s figure of just over VND 135 million.

For the first six months of 2024, Bibica’s revenue reached VND 619 billion, a 38% increase, and their net profit was VND 26 billion, 9.2 times higher than the same period last year.

Similarly, HNF also demonstrated positive financial results. In Q2 2024, their revenue reached VND 361 billion, an 8% increase year-over-year. Their gross profit increased by 53% to nearly VND 115 billion due to a significant reduction in the cost of goods sold.

During this period, the company significantly reduced its interest expenses from VND 17.5 billion to VND 7.3 billion. However, selling expenses increased by 27% to VND 58 billion, and administrative expenses also rose slightly to over VND 11 billion.

As a result, Huu Nghi Food reported a net profit of VND 40.6 billion, an impressive 7.8 times higher than the same period last year.

For the first six months of 2024, the company recorded a revenue of VND 813 billion, an 18% increase, and an after-tax profit of VND 60 billion, a substantial 7.5 times higher than the previous year. With a pre-tax profit of VND 69 billion, HNF has already achieved its full-year profit plan just in the first half of the year.