Sabeco brews highest profit in five years

Sabeco’s after-tax profit of $77 million in the second quarter marked a record quarterly high since ThaiBev became the brewer’s majority shareholder five years ago.

The brewery attributes the performance to removal of pandemic-related travel restrictions and recovery in demand.

Sabeco, listed on the Ho Chi Minh Stock Exchange (HoSE) as SAB, reported net revenues of VND9,000 billion ($385 million) in Q2, up 25% year-on-year, while profits went up 67% to VND1,793 billion ($76.7 million).

Thailand's ThaiBev owns 53% of Sabeco, a top beer producer in Vietnam, after it acquired the stake in 2017.

Better control of expenses is another reason behind its record high profit, according to the company's financial statement.

Gross profit margin soared to 34.24%, up five percentage points compared to Q1 and also a record high since the acquisition.

Spending on advertisement and promotion declined by 8%, while sales surged strongly, the company noted.

For the first six months, Sabeco earned revenues of VND16,424 billion and nearly VND3,030 billion ($129.6 million) in after-tax profit, fulfilling 47% and 66% of the year target, respectively.

Beer accounted for 88% of the revenue, with wine, alcohol and others making up the remaining.

The company’s total assets as of the end of June expanded by VND1,000 billion compared to the beginning of the year to VND31,300 billion. It currently holds VND15,400 billion ($658.7 million) in undistributed profit.

At its annual general meeting in mid-April, Sabeco said that in the second phase of its shake-up that started this year, the firm would accelerate growth and development. It completed the first phase of restructuring, which took three years, in 2021.

ThaiBev is the flagship business of TCC Group, led by Charoen Sirivadhanabhakdi, the self-made billionaire widely regarded as Thailand's king of mergers and acquisitions.

ThaiBev acquired 53% of the top Vietnamese beer producer for $4.8 billion in December 2017, then started restructuring the company, whose established brands include Saigon Beer and 333.

Notably, the logo of Saigon Beer (Bia Saigon) was put on Leicester City Football Club shirts in the English Premier League during the 2018/19 season thanks to a partnership agreement between the club and ThaiBev.

On the HoSE, SAB shares closed at VND116,700 ($6) a piece on July 27.