Vietnam: Sabeco reports 33% jump in 2016 profit

Vietnam’s biggest brewer Sabeco has reported a profit of VND4.6 trillion ($205 million) for last year, a 33 percent jump from 2015 and 27 percent higher than its target, according to a statement filed at the Ho Chi Minh Stock Exchange.

Saigon Beer Alcohol Beverage, as the company is officially known, just listed its shares on the country’s main bourse in December, eight years after its initial public offering. It reported VND30.66 trillion in revenue last year, up 13 percent from a year ago.

Sabeco, one of a few state-owned companies which have performed relatively well, currently remains 89.59 percent owned by the government.

With a share of nearly 41 percent of the domestic beer market, Sabeco is among the most sought-after companies by foreign investors, with suitors including Japan's Kirin Holdings, Thai Beverage and Dutch beverage giant Heineken, according to an official from the trade ministry.

In an attempt to accelerate the privatization of state-owned enterprises, the Vietnamese government said it would sell its entire stake in Sabeco this year.

Meanwhile, Hanoi Beer Alcohol Beverage, or Habeco, posted a net profit of VND740 billion, down 20 percent from 2015.

Habeco, with a 19.8 percent market share, is the third largest brewer in Vietnam, behind Sabeco with a market share of 41 percent and Heineken with 21.6 percent, according to the Vietnam Beverage Association.

That means as combined, Sabeco, known for Bia Saigon and 333 brands, and Habeco account for about 60 percent of the domestic market.

According to market research company Nielsen, while Sabeco has managed to raise its market share in northern provinces to 15.5 percent in the first half of last year from 10 percent in 2014, Habeco has failed to strengthen its dominant position in the north. The latter controlled 50 percent of the northern market in the first six months of last year, down from 55 percent in 2014.

Beer consumption in Vietnam rose 12 percent year-on-year to reach 3.8 billion litres last year, according to the trade ministry.

Vietnam is Asia’s third largest beer consumer by volume after China and Japan.

Industry expects annual growth of 4 percent to 5 percent for the next five years. The country’s annual beer output is forecast to hit 4.1 billion litres by 2020, according to government projections.

The stock market debuts of both Sabeco and Habeco have been sped up in the government’s latest attempt to boost investment and increase transparency.

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