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Sabeco's Q1 net profit at nearly $50mn

Released at: 19:36, 04/05/2017

Sabeco's Q1 net profit at nearly $50mn

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Profit up 18.8% on 4.9% more revenue, first quarter financial report shows.

by Anh Duy

The Sai Gon Beer, Alcohol and Beverage Corporation (Sabeco)’s after-tax profit in the first quarter of 2017 rose 18.8 per cent year-on-year to VND1.12 trillion ($49.8 million), its first quarter consolidated financial statement reveals.

It also reported that total revenue had increased 4.9 per cent to VND7.48 trillion ($329 million), with pre-tax profit up 18.2 per cent to VND1.45 trillion ($63.7 million). As at March 31, total assets stood at VND18.75 trillion ($824.25 million), a decline of 2.3 per cent since the beginning of the year.

Revenue increased sharply, it wrote, because selling prices rose in the first quarter, making the percentage of total selling costs out of the company’s revenue fall significantly.

During the first quarter, Sabeco sold its entire 0.46 per cent stake in Eximbank, which was recorded at VND36.6 billion ($1.6 million) as at January 1. The divestment helped increased Sabeco’s financial income by 1.5-fold to VND145 billion ($6.4 million).

Sabeco remained a shareholder of nine other companies, including some financial and banking institutions: the Orient Commercial Joint Stock Bank (OCB), DongA Bank, PVI Southern Insurance Company, and the Sabeco Packaging Joint Stock Company. Among these, the largest investments are in the OCB and DongA Bank, with initial values of VND216 billion ($9.5 million) and VND136 billion ($6 million), respectively.

New CEO approved

Minister of Industry and Trade Tran Tuan Anh has approved Mr. Nguyen Thanh Nam becoming the CEO of Sabeco, representing the ministry in managing the use of State capital at the brewer.

Mr. Nam is currently the Deputy CEO of Sabeco and also a member of the company’s Board of Management. He was elected to his new position during Sabeco’s extra-ordinary shareholders meeting held in February.

He will take over from Mr. Le Hong Xanh, another Deputy CEO that has been acting CEO since last August and managed the company’s Board of Directors. After the decision comes into effect in May, Mr. Xanh will remain as Deputy CEO and will retire in July.

One step closer to equitization

The Ministry of Industry and Trade last month submitted a plan for the divestment of the government’s majority stake in Sabeco, moving the country’s largest brewer one step closer to its long-awaited equitization.

Vietnam has one of the world’s most attractive beer markets and the largest in Southeast Asia, thanks to a young population that consumed nearly 4 billion liters in 2016. Several foreign brewers, from Kirin to Heineken, have been eyeing Sabeco since it was earmarked for equitization.

But the sale of the government stake has faced repeated delays. A limited offering last year listed just a fraction of the group, leaving the State with almost 90 per cent to divest.

Foreign companies and their advisers have grumbled over the two-stage divestment process, including the initial, limited IPO that has seen the price of illiquid Sabeco shares skyrocket. Sabeco listed at VND110,000 ($4.87) but has touched VND227,000 ($10). Its share closed on May 4 at VND199,000 ($8.75).

Sabeco had received approval to appoint Ernst & Young and Bao Viet Securities to advise on the sale of the State stake, worth $5.2 billion at market prices.

It plans to increase net profit this year to VND4.7 trillion ($206.6 million), up 1 per cent from 2016, when net profit jumped 33 per cent. It targets beer sales of 1.7 billion liters, up 3.4 per cent.

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