Brewer giant Habeco posts biggest quarterly loss in 4 years

Habeco, among the top four brewers in Vietnam by market share, suffered a net loss of VND21 billion ($828,570) in the first quarter of 2024, up nearly sixfold from the same period last year.

This marks the first quarterly loss following three consecutive quarters of positive results, and the biggest quarterly loss since Q1/2020 for the brewer, listed on the Ho Chi Minh Stock Exchange as BHN.

Habeco attributed the loss to low deposit interest rates, resulting in a 16% year-over-year decline in revenue from financial activities to VND37.9 billion ($1.5 million) in Q1 this year.

In addition, the company ramped up market investments during the spell, with its sales costs jumping 13% year-over-year to nearly VND231 billion ($9.1 million).

Expenses for advertising and promotions climbed 42% to approximately $105 billion ($4.1 million), and staff costs surged 21% to over VND34 billion ($1.34 million).

During Jan-March, the firm generated a net revenue of VND1.31 trillion ($51.6 million), up nearly 12% year-on-year. Its gross profit hiked 8.5% year-over-year to VND266.8 billion ($10.5 million).

As of end-March, the brewer’s total assets had plunged by nearly VND600 billion ($23.67 million) to VND6.55 trillion ($258.5 million). Notably, the amount of cash and cash equivalents had decreased by nearly 54% to VND540 billion ($21.31 million), and inventory had declined 10% year-over-year to VND646 billion ($25.49 million). Liabilities had plummeted by VND575 billion ($22.69 million) to 1.27 trillion ($49.99 million) from early this year.

This year, the firm is aiming for VND6.54 trillion ($258.16 million) in product revenue and a net profit of VND202 billion ($7.97 million), both lower than the 2023 results.

The 2024 goals have been set against the backdrop of a challenging business environment, the sluggish recovery of consumer purchasing power, strict zero-alcohol driving laws, and intense competition in the local beer market.

Habeco is a leading brewer in Vietnam with brands Hanoi beer and Hanoi draft beer. A report by brokerage house MB Securities in June 2022 showed that Heineken held the largest portion of Vietnam’s beer market in 2021 at 44.4%, followed by Sabeco with 33.9%, Carlsberg with 8.7%, and Habeco with 7.4%.

Habeco closed Friday at VND38,100 ($1.5) per share.