Top brewer Sabeco reports $94 mln H1 profit, down 27%

Vietnam’s leading beer maker Sabeco, owned by Thailand's ThaiBev, has reported first-half after-tax profits of VND2.21 trillion ($93.5 million), down 27% year-on-year.

The company, which holds about 40% of the beer market in Vietnam, recorded H1 net revenues of VND14.53 trillion ($613.6 million), down 11% year-on-year.

Sabeco blames the lower revenues and profits on fierce competition from international beer brands, an ongoing domestic economic downturn due to global economic instability, continued impacts of Decree 100, which imposes strict penalties on drunk driving, as well as higher input, selling and administrative expenses.

As of June 30, Sabeco's total assets stood at VND33.65 trillion ($1.42 billion), down 2% compared to the beginning of the year, with cash and cash equivalents at VND3.74 trillion ($158.06 million), down 8%.

On the Ho Chi Minh Stock Exchange, the major’s SAB stock closed Wednesday at VND160,200 ($6.77).

For 2023, Sabeco has set net revenue and post-tax profit targets of VND40.27 trillion ($1.72 billion) and VND5.78 trillion ($246.2 million), up 15.1% and 5% year-on-year, respectively.

Also this year, it is looking to increase its ownership to a majority stake in the Saigon Binh Tay Beer Group JSC, which operates six beer plants and two packaging factories.

Sabeco has been in the process of raising its ownership in the Western-Saigon Beer JSC from 51% to more than 70%. These moves will help Sabeco improve cost and operational efficiency and expand its product portfolio, the company says.

It expects sub-premium beer consumption to keep growing, but demand would also shift to lower segments due to incomes being impacted by lingering Covid-19 pandemic effects.

Sabeco says it will focus resources this year on branding and marketing activities as also distribution. It plans to introduce new drinks and apply 4.0 technologies in its business and governance activities.

The company operates 26 breweries and 11 trading subsidiaries in Vietnam and runs a distribution network consisting of hundreds of thousands of retailers nationwide. Its most popular brands in Vietnam are Lac Viet, Saigon Chill, 333, Saigon Special, Saigon Export, Saigon Lager, and Saigon Gold.

Thailand's ThaiBev spent almost $5 billion on a 51% stake in Sabeco in December 2017. Its current holding is 64%.