ThaiBev-run brewer Sabeco sees Q2 earnings up 8% despite strict drunk driving rules

Ho Chi Minh City-based Sabeco, controlled by Thai Beverage, reported a consolidated net profit of VND1,248.3 billion ($49.3 million) in Q2 this year, up 7.7% year-on-year, despite the enforcement of stricter drunk driving rules in the country.

This was the second quarterly earnings growth running and the highest figure over the past seven quarters, according to the brewer’s financial statements.

Sabeco, 53.59% owned by Thai-controlled Vietnam Beverage Co. – a unit of Thai Beverage – and 36% by the industry ministry, booked revenue of VND8,086.3 billion ($319.43 million) in Q2, down 2.7% from a year earlier.

The firm attributed its higher earnings to lower sales (mostly advertising spend) and administrative expenses, which helped partially mitigate the lower gross profit, interest income, and profits from affiliates.

In H1/2024, the brewer, among the biggest players in the Vietnamese beer market, recorded a consolidated net profit of VND2,245.6 billion ($88.7 million) on revenue of VND15,269.8 billion, up 5.6% and 5.1% year-on-year, respectively.

Higher revenue was driven by price increases amid the ongoing strict implementation of Decree 100, which has zero tolerance for drunk driving, said the company.

In the six-month period, Sabeco spent VND1,031 ($40.72 million) on advertising and promotions, down 15.5% year-on-year.

The company is aiming for VND4,580 billion ($181 million) in net profit and VND34,400 billion ($1.36 billion) in revenue this year. As such, the H1 performance fulfilled respective 65% and 44% of its full-year profit and revenue targets.

As of June 30, Sabeco had total assets of VND34,153 billion ($1.35 billion), little changed from end-2023, including VND6,034 billion in cash and cash equivalents.

Its owner’s equity was VND25,130 billion ($992.7 million), including VND9,823 billion in retained earnings.

Sabeco shares, listed on the Ho Chi Minh Stock Exchange as SAB, closed up 1.85% at VND55,000 ($2.17) apiece on Friday.