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Habeco expects lower profits in 2019

Released at: 18:15, 25/04/2019

Habeco expects lower profits in 2019

Photo: vietnambiz

Company to invest more in marketing, AGM hears.

by Minh Do

The Hanoi Beer Alcohol Beverage Corp. (Habeco), Vietnam’s largest brewer, plans to introduce two new products to the market in the second quarter of this year, Chairman Tran Dinh Thanh told its recent annual general meeting (AGM).

Financial profits will be greatly reduced this year. The company will invest in marketing activities to maintain its market share, which will offer support in the years to come. This focus could lead to higher costs and declining profits. Competitors such as Sabeco, Heineken, and Thaibev have also invested significant amounts.

The AGM presented the 2019 business plan to investors, with a consumption target of 438.1 million liters, in which beer will total 434.5 million liters and UniAqua bottled water 3.6 million liters. Total revenue is to exceed VND8.27 trillion ($356.7 million), with after-tax profit of VND310 billion ($13.37 million); the lowest since 2009.

Habeco did not reach all of its 2018 business targets. Total sales were VND429.4 billion, representing 85.9 per cent of the plan, with beer consumption at 426.1 million liters, or 85.9 per cent of the plan, and bottled drinking water 3.3 million liters, or 88.3 per cent. Sales of main products reached VND7.5 trillion ($323.1 million), equal to 85 per cent of the plan. Pre-tax profit was VND626.4 billion ($27 million), or 62.5 per cent of the plan. It expects a dividend payment of 10 per cent this year.

The company has also prepared to implement an investment project to improve capacity at its Hanoi - Me Linh brewery this year, investing in pouring lines and supporting equipment.

Growth in Vietnam’s beer market slowed in 2018, to about 5 per cent. Main markets for Habeco products - northern and central Vietnam - were down 3 per cent compared to 2017 but remain fiercely competitive. Sabeco saw growth of 32 per cent and Heineken Vietnam 71 per cent.

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