Dairy giant Vinamilk targets 5% pre-tax profit growth in 2024

Vietnamese dairy giant Vinamilk aims to earn VND63.16 trillion ($2.5 billion) in revenue and VND11.5 trillion ($453.92 million) in pre-tax profit this year, up 4.4% and 5.1% year-on-year, respectively, CEO Mai Kieu Lien said on Thursday.

If the plan is fulfilled, the company, listed on the Ho Chi Minh Stock Exchange as VNM, will break the revenue record set in 2021 and post the second consecutive year of positive profit growth.

In Q1/2024, the company's revenue and after-tax profit increased by 1.2% and 15.8% respectively compared to the same period last year. In 2023, it recorded revenue of VND60.5 trillion ($2.39 billion), equivalent to the 2022 performance, and an after-tax profit of VND9.02 trillion ($356 million), a year-on-year increase of 5.1%, Lien told the AGM.

With these results, the dairy giant will pay cash dividends at a combined rate of 38.5%, equivalent to VND8.05 trillion ($317.74 million). The company has advanced 29% of the dividends, and the remaining 9.5% will be delivered within six months of the 2024 AGM.

Answering shareholders' questions about its dividend payment policy, Lien affirmed that the company always balances development investment and dividends to ensure shareholder rights, and commits to maintaining the cash dividend rate.

“In recent years, up to 91% of the firm’s after-tax profit each year has been used to pay dividends, so it is no longer possible to increase it further,” she noted.

The company's revenue has gone flat for many years due to the impact of the Covid-19 pandemic, as well as the economic downturn and weak purchasing power, so Vinamilk has focused on innovating itself via changing brand identity and promoting digital transformation, with top priorities given to restoring market share and sustainable sales and profits.

At the same time, Vinamilk will focus on the domestic market and exports. The company has exported its products to more than 60 countries, she said, revealing a 14% export growth in the first four months of this year.

Besides the core dairy business, the company will tap business opportunities in new markets through mergers & acquisitions, joint ventures, or venture investments, Lien said, citing a cattle breeding and beef processing project in Tam Dao district, the northern province of Vinh Phuc, with partner Sojitz Corporation (Japan) as an example.

The CEO said that once operational, the project is expected to bring in revenue of VND3 trillion ($118.4 million) per year.

Vinamilk is looking for suitable land to expand its dairy farms in Vietnam, she added.

On the stock market, VNM closed Thursday at VND64,700 ($2.55) per share.