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Vinamilk reaches 90% of annual plan in 9M

Released at: 15:55, 02/11/2016

Vinamilk reaches 90% of annual plan in 9M

Photo: Duc Anh

Dairy giant records impressive business results in first nine months.

by Duy Anh

The Vietnam Dairy Products Joint Stock Company (Vinamilk) recorded robust growth in the first nine months of this year, as the State Capital Investment Corporation (SCIC) prepares to sell 9 per cent of its stake in the dairy giant this month or next.

Deputy CEO of the SCIC Nguyen Hong Hien confirmed with VET on October 27 that “the SCIC will sell 9 per cent of Vinamilk at the end of November or early December.”

After-tax profit in the first nine months stood at VND7.5 trillion ($336 million), up 28 per cent year-on-year and equal to 90.5 per cent of the annual plan of $371 million, its consolidated financial statement for the third quarter revealed.

From July to September net revenue reached VND12.205 trillion ($546.78 million), up 16 per cent year-on-year, while after-tax profit was VND2.55 trillion ($114.24 million), a 20 per cent increase year-on-year.

Net operating profit was therefore VND3.05 trillion ($136.64 million), up 18 per cent year-on-year, with after-tax profit at VND7.53 trillion ($337.34 million), 28 per cent higher year-on-year. Earnings per share (EPS) therefore stands at VND4,697 ($0.21).

The profit gained during the third quarter is down to increases in revenue from a change in products, where the focus is on highly effective segments, the third quarter report noted.

The proportion of Vinamilk’s investment in securities is relatively small compared to total equity. It has divested its entire holding of more than VND82 billion ($3.67 million) in the ABBank.

The group has entered into a share purchase agreement to transfer its holdings in Bao Viet Bank but the transaction is still to be completed and it has only received an advance payment of VND447.82 billion ($20.06 million) from a third party.

In the first nine months its net revenue from the domestic market was VND28.69 trillion ($1.285 billion), up 20 per cent year-on-year, and gross profit stood at VND11.74 trillion ($525.95 million), up 25 per cent year-on-year.

Vinamilk’s overseas markets generated nearly VND6.3 trillion ($282.24 million) in revenue in the nine-month period, up 7.43 year-on-year but gross profit stood at more than VND3.05 trillion ($136.64 million), up 27 per cent year-on-year. The profit margin in overseas markets was rather high, at 48.5 per cent.

In early October Vinamilk launched its e-commerce website Vinamilk eShop, which is expected to expand its sales channels to meet customer demand. In related news, Vinamilk came to a cooperative arrangement with FPT Retail in mid-October to open a retail store chain selling Vinamilk’s products.

Vinamilk has begun construction of the Da Lat Organic Dairy Farm in the central highlands’ Lam Dong province, which is expected to open in December and produce high-end products.

Overseas, Vinamilk is currently negotiating to buy a US milk firm to increase its operational scale and revenue. CEO Mai Kieu Lien said she hopes to finalize the deal in early 2017 but declined to reveal the partner’s name or the deal’s value, according to Bloomberg.

Vinamilk’s products are now sold in nearly 200 stores in 45 cities and provinces in Vietnam and in more than 43 countries around the world, such as Cambodia, Thailand, South Korea, Japan, China, Turkey, Russia, Canada, and the US. The company has also bought a 22.8 per cent stake in Miraka in New Zealand, 70 per cent in Driftwood in the US, and 51 per cent in Angkor Milk in Cambodia, as well as a subsidiary in Poland as a gateway to Europe.

In 2017 it plans to begin construction of a new milk powder plant in Vietnam and will expand production at its New Zealand plant, which is operating at full capacity.

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