Vietnam Tobacco Company’s Impressive Financial Performance in 2024

Vietnam Tobacco Company, or Vinataba, has released its audited consolidated financial statements for 2024, revealing impressive growth in revenue. The company achieved net revenue of nearly VND 28,493 billion, an increase of almost 18% compared to 2023.

This translates to a remarkable daily revenue of VND 78 billion in 2024, the highest since Vinataba started publishing its financial results in 2015.

After deducting cost of goods sold, Vinataba’s gross profit from sales and services stood at over VND 5,181 billion, with a gross profit margin of 18.2%, slightly lower than the 19.1% achieved in 2023. Additionally, the company recorded a financial income of nearly VND 332 billion, a decrease of 4%.

Selling expenses and general and administrative expenses amounted to VND 1,372 billion (up 22%) and VND 2,643 billion (up 11%), respectively. Financial expenses decreased by 2% to VND 259 billion.

Furthermore, Vinataba’s ownership in six joint ventures and associates contributed over VND 350 billion to the bottom line. The company also recognized nearly VND 308 billion in other income, mainly from financial support received from Philip Morris International, its joint venture partner in the Marlboro brand.

For the full year 2024, Vinataba’s consolidated after-tax profit reached nearly VND 1,520 billion, slightly lower than the VND 1,527 billion recorded in 2023. This profit translates to an impressive average daily profit of over VND 4 billion for 2024.

Looking ahead, Vinataba has set a target of an 8% increase in consolidated revenue for 2025, aiming to reach VND 31,960 billion.

Impact of New Tax Policy

According to the amended tax law, from 2027, cigarettes and similar products will be subject to a special consumption tax based on an absolute rate. The absolute tax rate for cigarettes will start at VND 2,000 per pack in 2027 and increase to VND 10,000 per pack by 2031.

Vinataba’s management estimates that with the new tax calculation method, total industry volume, including Vinataba’s, could drop by 30-50% after 2026. The Vietnam Tobacco Association has submitted a proposal to the government and the National Assembly’s Standing Committee, recommending a careful consideration of the rate increase and its implementation timeline.

Vinataba’s Chairman expressed concerns about the potential sudden increase in tax rates, highlighting the risk of a surge in cigarette smuggling, which could directly impact revenue collection targets. Historically, tax increases were implemented gradually, with a 5% increase every three years, allowing businesses time to adjust. The new timeline, however, may catch the industry off guard and make it challenging to maintain market share.

Given the current situation, Vinataba will reshape its strategy, shifting from quantity-based growth to quality-focused development. The company will emphasize the application of science, technology, and digital transformation, embracing green transformation.

Established in 1985, Vinataba, or the Vietnam Tobacco Company, initially comprised four cigarette factories and several tobacco material production facilities. Today, it has evolved into a fully integrated business, encompassing tobacco leaf production, cigarette manufacturing, import-export activities, tobacco-related trade and services, and even expansion into the food and beverage industry.

Vinataba is recognized as one of the largest state-owned corporations in Vietnam, dominating the country’s tobacco industry. In 2024, the company contributed over VND 16,675 billion to the state budget and has consistently ranked among the top budget contributors in Vietnam for many years.

In the list of Vietnam’s largest budget-contributing enterprises, the tobacco industry is strongly represented, with four companies making the list. Vinataba leads the way, ranking 11th, followed by the Khanh Vietnam Corporation (Khatoco) at 31st, the Saigon Industry Corporation (CNSG) at 37th, and the Dong Nai Food Industry Corporation (Dofico) at 82nd.