Vinamilk paradox: profit soars, stock price tumbles

Vietnam’s dairy giant Vinamilk reported revenue of VND15.62 trillion ($639.64 million) and a net profit of VND2.33 trillion ($95.4 million) in the fourth quarter of 2023, up 3.6% and 24.4% year-on-year, respectively, according to its financial statement.

This was the third consecutive quarter that Vinamilk, listed on the Ho Chi Minh Stock Exchange as VNM, 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.

However, the company said it still recorded positive revenue thanks to market share recovery and thriving exports, which rose 11.7% year-on-year.

Vinamilk’s gross profit margin improved from 38.8% to 41.2%, driven by increased revenue and falling input costs.

The financial segment also showed good results with revenue expanding 13% to VND429 billion ($17.57 million) and financial costs falling by nearly half to VND119 billion ($4.87 million).

For the whole year, 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%.

The company continued to increase deposits to VND20.14 billion ($824.73 million), up VND2.7 trillion from the beginning of the year. Its cash and cash equivalents climbed from VND2.3 trillion to VND2.9 trillion ($118.76 million).

Total cash and deposits reached more than VND23 trillion ($941.66 million), accounting for 44% of its total assets.

However, in contrast to the brighter business picture and the improving stock market with the benchmark VN-Index gaining 14% from November 2023, VNM share are still on the fall. The ticker has dropped from VND80,300 ($3.29) to VND66,900 ($2.74) per share since the beginning of September 2023, approaching the lowest price in eight years (VND65,500 per share).