Turbulent times of Vietnam's food giant Kido

By Ngoc Diem, Thai Ha
Thu, May 15, 2025 | 2:27 pm GMT+7

Profits of Kido Group, a leading food company in Vietnam, have been lower than its leaders' expectations in the past few years, with its real estate investment and divestment from Kido Foods not being smooth sailing.

Some products of Kido Group. Photo courtesy of Thanh Nien (Young People) newspaper.

Some products of Kido Group. Photo courtesy of Thanh Nien (Young People) newspaper.

Profits on a decline

Kido Group (HoSE: KDC) recorded an 18.2% increase in revenue to VND2,146 billion ($82.76 million) in Q1/2025, according to the company's consolidated financial statements.

Cost of goods sold surged by over 23%, so gross profit remained flat at VND356.7 billion ($13.75 million).

Financial activities saw a loss of VND19 billion ($732,600), while in Q1/2024, it made a profit of VND12.7 billion.

Total sales and management expenses increased by 16.2% to more than VND400 billion ($15.42 million), higher than gross profit.

The company reported a net operating loss of VND48 billion in the quarter, a loss after tax of VND67 billion ($2.58 million), and a loss attributable to the parent company shareholder of VND75.5 billion.

In the period from 2021-2024, Kido Group's business results gradually declined. Especially in 2024, revenue fell to VND8,324 billion ($320.96 million), the lowest level in four years, and profit after tax of the parent company shareholder was VND37 billion ($1.43 million), down 74% compared to 2023 and the lowest level since 2008.

Such business results were lower than the expectations of Kido's leaders. Since 2021, the board of directors has always presented very ambitious business plans, with revenue of VND11,500-15,000 billion ($578.37 million) and pre-tax profit of VND800-900 billion ($34.7 million) which showed their great expectations of the business segments.

But the actual figures, especially profits, were very low. In 2023, the group fulfilled only 36% of its profit target, while the figure for 2024 was 13%.

According to the annual report, the company continues to be steadfast in its target of VND13,000 billion ($501.25 million) in revenue and VND800 billion ($30.85 million) in pre-tax profit for 2025.

Tran Kim Thanh, chairman of the board of directors, said that achieving the 2025 business plan is a challenging task.

In addition to its existing strengths and foundations, Kido has planned to carry out a major revolution, reshuffling the company's internal and external operations. “By all means, Kido must survive and overcome this difficult period. That's our top priority,” he added.

Main business lines facing difficulties

The past five years have been a period of many changes for Kido. In 2020, the group announced a restructuring plan, placing all independent units such as Kido Foods (refrigerated products), Vocarimex, and Tuong An Vegetable Oil (cooking oil) under the group's management.

The goal is to re-plan all resources, optimize production processes, reform and tighten up the distribution network to respond flexibly and quickly to market changes.

This year also marks Kido's return to the bakery industry after five years of selling the confectionery segment to Mondelez International (USA).

At the same time, Kido set a series of ambitions in the retail sector with the Chuk Chuk chain of stores selling soft drinks, milk tea, fresh cakes, and seeks the number one position in the fresh water industry together with Vinamilk (HoSE: VNM) via their Vibev joint venture.

However, the Chuk Chuk chain and the joint venture were born during the pandemic, so the results were not as expected. By 2022, the Vibev joint venture disbanded and Kido withdrew capital from the Chuk Chuk milk tea chain.

In terms of product lines, Kido has two main segments, including cooking oil and food (ice cream and cakes). Of their revenue, cooking oil accounts for about 70-80%. With 90% of raw materials for vegetable oil production having to be imported, in recent years, Kido has had difficulty controlling inputs.

World's palm oil prices have become more expensive in recent years, with Indian importers paying $1,185 per ton of crude palm oil, more than double the level of less than $500 in 2019, according to Reuters.

This is due to a slowdown in production as Indonesia and Malaysia stopped expanding their palm plantations. On the other hand, Indonesia has increased the use of this vegetable oil to produce biofuel. At the same time, the increase in palm oil prices has caused buyers to switch to soybean oil and sunflower oil, and the prices of these vegetable oils have also skyrocketed.

Kido leaders once said that they had to closely monitor and sign on palm oil prices every day and every hour to have imported oil prices that could lead to affordable prices for consumers.

In 2024, the cooking oil segment with Tuong An, Vocarimex, and Kido Nha Be as the main contributors, brought about VND6,703 billion ($258.45 million) in revenue, equivalent to 2023.

Gross profit margin reached 14.3%, a significant improvement compared to the levels of below 10% in 2022 and 2023.

In the food segment with the main contribution from Kido Foods, gross profit margin hit 57-58% in the period of 2020-2022.

However, in 2023, the group withdrew capital from the cold food industry when selling a 24% stake at Kido Foods, transforming it from a subsidiary to an affiliated company.

On the contrary, Kido invested more heavily in the bakery segment when acquiring the company that owns the Tho Phat dumpling brand (frozen dumpling and steamed cake industry).

After divesting from Kido Foods, revenue from this segment mainly comes from fresh cakes, moon cakes and Tho Phat cakes (steamed cakes and dumplings). Gross profit margin dropped to 33-36%. In 2024 alone, revenue from the food segment reached VND1,388 billion or $53.52 million (Tho Phat recorded VND1,127 billion), while gross profit margin hit 36%.

Kido's report shows that both the cooking oil and food segments suffered pre-tax losses in 2024, and the saviors were other product lines and the VND150 billion ($5.78 million) profit from joint ventures and associates.

At the end of 2023, Kido entered the fish sauce and seasoning powder industry. In 2024, Kido bought shares to hold a 75.39% stake at Hung Vuong - the owner of Hung Vuong Plaza shopping mall, helping to expand the group's retail ecosystem and bringing in revenue of VND84 billion ($3.24 million).

The group have five affiliated units including Lavenue (real estate), Dabaco Food (pork), LG Vina (cosmetics), Tafoco (real estate), and Kido Foods (ice cream, yogurt).

Unsmooth deals

In 2023, Kido Group encountered an unexpected factor when it set aside a provision of VND753 billion ($29.03 million) for a financial investment, causing a heavy loss of VND544 billion ($20.98 million) in the last quarter of the year, wiping out the results of the previous three quarters.

Kido had to set aside VND772 billion for an investment of VND1,087.5 billion in Lavenue Investment JSC, the investor of the Lavenue Crown project, located at 8-12 Le Duan street, District 1, Ho Chi Minh City.

Since 2018, Lavenue's investment implementation has been comprehensively inspected by authorities to find violations of decisions on management and use of state assets causing loss and waste related to the project.

Also in 2023, the group completed the divestment of 24% of Kido Foods capital, bringing in a profit of VND1,053 billion ($40.6 million) and selling 24% of Calofic capital, recording a profit of VND76 billion ($2.93 million) in financial revenue.

However, according to its extraordinary resolution dated January 24, 2025, the group's shareholders agreed not to approve the transaction to sell 24.03% of Kido Foods to Nutifood Investment Company Limited.

Accordingly, the company's shareholders authorized the board chairman to decide on specific terms, transactions, agreements, and negotiations with partners on transactions and other related issues.

Previously, the group sued Kido Foods and Dat Viet Media JSC (Datviet), requesting them to stop using the Celano brand.

According to the update in Kido's 2024 audited financial statements, on January 17, the court issued a decision to apply temporary emergency measures, prohibiting Kido Foods and Datviet from using the Celano brand.

On January 25, the court ordered Kido Foods to pay VND50 billion ($1.93 billion) to the frozen assets of Kido Foods to ensure the performance of any obligations to the group, and Kido Foods paid the money on February 3.

The court then canceled the emergency measures. The report said that the parties are still carrying out necessary procedures to consider the compensation value, if any.

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