Thailand & Vietnam: ThaiBev’s beer unit posts 72.4% increase in net profit for first quarter through December 2020
Beer and liquor giant Thai Beverage (ThaiBev) on February 11 said its brewery unit BeerCo, which it intends to spin off and list on the Singapore Exchange (SGX) mainboard, posted a net profit of S$77.4 million for the first quarter ended Dec 31, 2020.
This represents a 72.4 per cent increase from S$44.9 million in the previous year, and comes despite lower sales revenue of S$1.32 billion - down 11.4 per cent from S$1.49 billion a year ago.
The lower sales revenues for both BeerCo's Thailand and Vietnam markets were attributed to the Covid-19 pandemic and measures adopted by their respective governments to mitigate its spread.
In Thailand, sales revenue dipped year on year by 8.2 per cent to S$741.4 million from S$807.7 million.
Sales revenue in Vietnam dropped a steeper 15.1 per cent to S$581.4 million from S$684.6 million, with the decline exacerbated by adverse weather conditions, Decree 100 and a later Tet compared to the prior year.
BeerCo's overall net profit margin however rose to 9.8 per cent from just 5.3 per cent for Q1 of 2020 with reduced distribution costs, administration expenses and management fees compared to the year before.
In ThaiBev's results presentation which included the latest set of financial statements for BeerCo, the group said it is looking to create the largest beer platform in Asean with its impending SGX listing.
A spin-off and listing would provide the business enhanced diversity and corporate structure; increase the value of its portfolio to dominate a growing mass market; and provide greater flexibility to explore beer partnerships and value enhancement, said the group.
The group also highlighted BeerCo's strong "local champion" brands that "evoke national pride", along with an extensive distribution network with over 90 per cent and 70 per cent channel penetration in Thailand and Vietnam, respectively.
ThaiBev earlier announced its intention to spin off and list BeerCo on Feb 5, after it received a no-objection letter from SGX for the listing of nearly 20 per cent of BeerCo.
BeerCo has three breweries in Thailand as well as an interest in a network of 26 breweries in Vietnam. Its business includes the production, distribution and sales of beer including the Chang and Bia Saigon brands.
In its Feb 5 announcement, ThaiBev said it sees significant growth potential in BeerCo, and that its position as one of the leading beer players in South-east Asia and its growth potential offered a distinct and compelling.
Shares of ThaiBev ended Thursday noon down two Singapore cents or 2.5 per cent at 78.5 Singapore cents, after the group's results were announced.
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