Despite Vietnam’s Strict No-Drink-Drive Laws, Sabeco’s Beer Profits Soar.

ThaiBev reported revenue of 71.6 billion baht in the second quarter of the fiscal year (January 1 to March 31, 2024), equivalent to nearly 51 trillion VND at an exchange rate of 708 VND per baht. This marked a 6.3% increase compared to the same period last year. Cost of sales rose by nearly 6% to reach almost 50 billion baht, while selling expenses increased by 9% and administrative expenses remained relatively unchanged.

As a result, the company recorded an after-tax profit of over 7.7 billion baht, an increase of 7%. However, profits from associated companies declined, resulting in a net profit of nearly 7 billion baht, a 4.9% decrease compared to the previous year.

The majority of ThaiBev’s profits came from its liquor segment, contributing over 5.8 billion baht, a slight increase from the previous year. Notably, the company’s beer segment showed significant growth, with profits rising from 559 million baht to 755 million baht, an increase of 35%. This growth was achieved despite challenges faced by its subsidiary, Sabeco, due to Decree 100 in Vietnam, which prohibits drivers from consuming alcohol before operating a vehicle.

Another segment that saw a substantial increase in profits was the non-alcoholic beverage segment (soda, mineral water, etc.), with profits reaching 281 million baht, an increase of over 80%. The food segment, however, recorded a loss of 30 million baht, compared to a profit of 7 million baht in the same period last year.

For the first half of the fiscal year, ThaiBev’s revenue stood at nearly 148 billion baht, a slight decrease compared to the previous year. Net profit reached 15.2 billion baht, a 5.6% decline. The liquor segment continued to be the main contributor to profits, with nearly 12.5 billion baht, while the beer segment grew by 21%, recording almost 1.6 billion baht.

In terms of revenue breakdown, the majority of ThaiBev’s revenue came from the sale of liquor and beer, contributing 44.3% and 42.3% of total revenue, respectively. Beer sales volume in the second quarter increased by 71%, reaching 533 million liters, but cumulative sales volume for the first half decreased by 5.7%, totaling over 1.1 billion liters.

As of the end of March 2024, ThaiBev’s total assets remained relatively unchanged from the beginning of the fiscal year, standing at over 496 billion baht. Interest-bearing debt increased slightly by 3% to reach 161 billion baht, with short-term debt amounting to over 7.6 billion baht, a 41% decrease compared to the previous year.

ThaiBev is the parent company of Sabeco, which it acquired in late 2017 through Vietnam Beverage. ThaiBev currently owns a 53.6% stake in Sabeco. The acquisition was made through Vietnam Beverage’s purchase of nearly 344 million SAB shares at a price of 320,000 VND per share, as part of the Vietnamese government’s divestment process. The total value of the transaction amounted to nearly 110 trillion VND (approximately 5 billion USD).

In the first quarter of 2024, Sabeco witnessed a nearly 16% increase in revenue, reaching nearly 7.2 trillion VND. Net profit stood at over 997 billion VND, a 3% increase. Sabeco attributed the improvement in revenue to increased sales volume and favorable effects from price adjustments made in the previous year. This resulted in higher net profit, despite being partially offset by a decrease in interest income (-22%) and a loss from joint ventures and associates of over 1.1 billion VND, compared to a profit of 44.5 billion VND in the previous year.

For the full year 2024, the company has set targets of 34,397 billion VND in revenue and 4,580 billion VND in after-tax profit, representing increases of 13% and 8%, respectively, compared to the previous year. As of the end of the first quarter, Sabeco has achieved 21% of its revenue target and 22% of its profit target.

Chau An