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Sabeco profits up 25%05/05/2022
Profit after tax Saigon Beer – Alcohol – Beverage Corporation (Sabeco – SAB) increased by 25% in the first quarter of the year thanks to the Lunar New Year.
Sabeco leaders assessed that revenue and profit after tax have improved and are higher than the same period last year due to the strong impact from the reopening of the market. During this period, the company also implemented many promotions for the new year. As a result, revenue increased by 25%, reaching more than 7,300 billion VND. In which, beer segment accounts for 87% of total revenue.
In addition, Sabeco also controlled well the group of recurrent expenses, especially selling and administrative expenses. These three items decreased by more than 10% compared to the first quarter of 2021. In which, advertising and promotion costs are reduced by more than 20%. In total, the company’s profit after tax is more than 1,200 billion VND.
Business results improved significantly over the same period but lower than in the previous quarter. For the same reason as above, revenue and profit in the fourth quarter of 2021 were 23% and 13% higher than in the first quarter of 2022. Compared to the targets set for the whole year, Sabeco has completed about a quarter of the plan.
This year SAB plans to regain its own business performance and is the most aggressive plan in the beer industry. Management expects the beer business to recover when tourism, restaurants and food services are stimulated. Saigon Beer also expects stability in production and business to exploit the domestic market with the purchasing power of tens of millions of people thanks to the well-controlled epidemic.
However, this beer company still believes that the whole industry is being affected by two unprecedented problems: the pandemic and the strict regulations of the Government. While Covid-19 causes short-term damage, the law on alcohol harm prevention has a long-term impact. Sabeco alone faces additional risks as consumers tend to shift to lower segments due to the affected income and the company will face stiff competition from other manufacturers in the battle for market share. .
The report of Mirae Asset Vietnam Securities (MASVN) said that beverage is in the group of industries with opportunities for profit growth. However, the industry’s gross profit margin will decrease due to high prices of raw materials, including malt, flavoring, sugar, aluminum and plastic. At the recent annual meeting, Sabeco leaders said that the company had contracts to buy raw materials in advance according to the plan. In the immediate future, this year, SAB will self-assess its inventory level at a safe threshold. However, the risk of rising raw material prices is considered unavoidable and Sabeco will find ways to increase revenue to offset the increased costs.
On the stock market, SAB’s stock has had quite positive price movements since the beginning of the year until now. This code has had two price increases, reaching a peak of 170,300 dong per share in mid-April. While a month ago, the market price of SAB had retreated to close to 150,000 dong per share. Closing on April 26, SAB reached 169,000 dong per unit, up 7% in a day and 11% higher than the beginning of the year.