Vietnam: ThaiBev collects $416 mln in dividends from Sabeco over 7 years

Vietnam Beverage, wholly owned by Thai Beverage, has raked in a combined VND10.6 trillion ($416.4 million at the current rate) worth of dividends from Sabeco since acquiring the country's former largest brewer seven years ago, Theinvestor.vn reported on June 17.

Sabeco plans to spend VND4.49 trillion ($176.33 million) on paying a cash dividend of VND3,500 a share for 2023. An interim dividend of VND1,500/share was paid in February, while the remainder is due next month.

Vietnam Beverage, a Vietnamese company, now controls 53.59% in Sabeco, listed on the Ho Chi Minh Stock Exchange as SAB.

Vietnam Beverage spent nearly VND110 trillion (equivalent to $4.8 billion) in 2017 to acquire 343.6 million Sabeco shares at VND320,000 apiece. The amount made it the largest M&A deal ever in the Asian beverage industry.

As such, ThaiBev has recovered approximately 10% of its investment in Sabeco through dividends since its acquisition.

Sabeco has been generous in cash dividend payouts, varying between 35% and 50% in recent years.

SSI Research, under leading brokerage house Saigon Securities Inc., has anticipated Sabeco�s earnings to grow at a double-digit rate in Q2/2024 thanks to the ongoing UEFA Euro championship and the Paris Olympics this summer.

SSI researchers, however, remained cautious about Sabeco�s outlook this year, citing tightened control over drunk driving, a slow change in consumer habits, and austerity.

Similarly, analysts with Mirae Asset said that Sabeco�s performance had yet to bottom out. Its average revenue between Q4/2023 and Q1/2024 was still 3.3% lower than in Q4/2022-Q1/2023.

Brewers in Vietnam are struggling with strict law enforcement and possible legal headwinds.

Drunk-driving tests across the country, following Decree 100/2019/ND-CP adopted in late 2019, have added additional costs to alcohol consumption, which had hindered the recovery of the domestic market.

Furthermore, the Ministry of Finance is considering raising the excise tax on alcoholic drinks, which will eventually make wine, spirits, and beer more expensive.