Vietnam: Sabeco to sustain growth trajectory in 2024

Saigon Beer - Alcohol - Beverage Corporation (SABECO) has announced its business results in 2023, boasting an after-tax of VND4.2 trillion, VietNam News reported on April 25.

The information was announced at the 2024 Annual General Meeting of Shareholders (AGM) held in HCM City on April 25. Leveraging market insights and mindful of global and Vietnam's economic forecasts, SABECO has outlined ambitious growth objectives for 2024, while pushing on commercial excellence, production efficiency and promoting Environment, Social and Governance (ESG).

In 2023, Vietnam's beer market faced significant challenges, including rising raw material costs as a result of disruptions in the global supply chain, rising inflation rates, and interest rates, and reduced consumer spending amid the economic recession, as well as the stringent enforcement of relevant policy. According to General Statistics Office, Vietnam witnessed a remarkable decrease in beer consumption, especially in the closing of 2023.

2023 consolidated financial report showed that SABECO recorded VND30.4 trillion in revenue and VND4.25 trillion in profit, representing 76 and 74 per cent respectively of the targets set out at AGM 2023. Reflecting on these business outcomes, the Board of Directors (BOD) suggested and approved a final dividend rate of 20 per cent, resulting in a 35 per cent annual dividend rate for shareholders.

Lester Tan - General Director of SABECO said: “While this result represents a 23 per cent drop from a year ago, we remain a healthy and profitable company that continues to deliver significant dividends to our shareholders. Changes are made so that regardless of changing market dynamics, Bia Saigon will stand to remain the leading beer brand in Vietnam.”

To attain such results, SABECO has been concentrating on three key areas: commmercial excellence, supply chain efficiency and ESG.

Series of culture – culinary events of Saigon Night, Vung Tau Beerfest, The Chill Fest, “Sao Cua Moi Cuoc Vui” singing competition and the Tet campaign “Don Tet Rong, nhan boi loSac” were successfully rolled out. These activities have not only helped SABECO strengthen their connection with the consumers, but also foster tighter bonds with the local distributors and stakeholders in its value chain, thereby, increase the sale chances.

Cost saving and effective production initiatives were implemented to foster this area. SABECO also completed the Warehouse Master Plan Project to enhance the management capability of supply chain and accelerate the route-to-market process.

In 2023, SABECO has established Nomination and Remuneration Committee (NRC) and Sustainability and Risk Management Committee (SRMC). This is to support and ensure that all areas of operation and production follow the ESG objective set by the group and Vietnam. Furthermore, SABECO installed the rooftop solar power to nine of its breweries, in parallel with fostering the environmental impact control protocol and corporate social responsibility to generate positive socio-economic values.

Strategically follow these three key pillars has helped SABECO to achieve outstanding recognition in 2023. Regarding market shares, Bia Saigon remains leading position in the market. Effectiveness enhancement in production management helps boost the cost efficiency; Bia Saigon’s product line, Bia 333 won gold and silver medals from Beverage Testing Institute (BTI).

Renewable energy adoption helped the corporation to reduce electricity usage to approximately 25 million kWh, equivalent to 18,000 tonnes of CO2 emission reduction.

ESG initiatives and Corporate’s Social Responsibility has brought SABECO to recognised with “Outstanding Enterprise for Employee”, “Top 100 Sustainable Businesses in Vietnam (CSI100)”, “Boards of Director committed to Corporate Governance Best Practice Awards”, “Top 50 Best Listed Companies in Vietnam”.

Considering favourable opportunities such as Vietnam's golden population structure, rapidly growing income levels, as well as the evolving policy landscape and global economic projections for 2024, SABECO sets a target of net revenue of VND34.3 trillion, profit of VND4.58 trillion in 2024, an increase of 13 and 8 per cent in respectively compared to 2023.

In order to attain the objectives for 2024, SABECO is steadfast to reinforce its three above areas of focus.

Koh Poh Tiong, Chairman of the Board of Directors said: “This year, the board has prioritised the corporation’s sustainability and risk management agenda through the newly established Sustainability and Risk Management Committee (SRMC). The SRMC will provide guidance to the Management team ensuring the effective implementation of ESG objectives and initiatives, while working closely with the board and audit committee to ensure risk management systems are implemented effectively, safeguarding the interests of our shareholders. We look forward to your continued support and you being part of our growth journey for reaching greater heights together,” he added.

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