Dairy giant Vinamilk's Q1/2024 business results are likely to be far better than the same period last year, said chief financial officer Le Thanh Liem at an investor meeting in early February.
The motivation partly comes from comparison with the low base of the same period in 2023, he said, elaborating that in Q1/2023, Vinamilk encountered many difficulties, especially high raw material prices, causing net profit to drop to VND1,857 billion ($76 million) – a five-year low.
The company has closed the purchase of raw materials at low prices this year to meet demand until June, and its gross profit margin will improve from 0.7% to 1% this year, Liem added.
However, in terms of demand, Liem does not expect a strong recovery, and the firm has no plans to increase selling prices in 2024.
Broker BIDV Securities (BSC) appreciated the prospects of Vinamilk stock and forecast that the company's 2024 profit could grow by double digits - an increase that has almost disappeared since 2018 - thanks to its lion’s share in the market and improved gross margin amid the downward trend in raw material prices.
Despite numerous difficulties, Vinamilk reported revenue of VND15.62 trillion ($639.64 million) and a net profit of VND2.33 trillion ($95.4 million) in Q4/2023, up 3.6% and 24.4% year-on-year, according to its financial statement.
It was the third consecutive quarter that Vinamilk recorded profit growth and also the highest growth rate compared to 5-8% in Q2 and Q3.
Vinamilk said the fast moving consumer goods (FMCG) industry saw a year-on-year decrease of 3% in Q4, with the dairy industry alone dropping 5%. In the difficult economic context, domestic consumers have changed their consumption habits such as prioritizing products and shopping channels with attractive promotions, using alternative products with suitable prices, and choosing bulk buy to save money.
For the whole of 2023, the firm posted VND60.4 trillion ($2.47 billion) in revenue, equivalent to the 2022 performance; and over VND9 trillion ($368.55 million) in after-tax profit, a year-on-year increase of 5.2%. With such results, it fulfilled 95% of the revenue plan and exceeded the after-tax profit target by 5%.
In the first nine months of 2023, Vinamilk launched and/or resumed 11 products and opened 11 new Vietnamese Milk Dream stores, increasing the total number to 657.
At present, Vinamilk's products are present in 59 countries and territories. It is actively approaching new markets in South America, the Caribbean, and west and south Africa. Besides the U.S., China is another massive market that the dairy giant is targeting.
Vinamilk's export segment also reaped many successes when its net export revenue increased by 4.4% compared to 2022 and that of its foreign branches expanded 6.5%.
With expectations of economic recovery, the dairy producer plans to set growth targets for both revenue and profit in 2024, with official figures to be announced at the 2024 annual general meeting of shareholders in early April.
In the stock market, VNM closed the Tuesday session at VND67,600 ($2.67) per share.