Shrinking profit for Sabeco’s Vietnam

Saigon Beer, Alcohol and Beverage Corporation (Sabeco) has released its consolidated financial statement for the first quarter of this year. Accordingly, Sabeco reported an increase in revenue but a decrease in profit.

Notably, its consolidated net revenue was VND7.81 trillion ($343.1 million), up 4.6 per cent on-year, after-tax profit decreased by 2.7 per cent to VND1.16 trillion ($50.96 million).

Besides, as of March 31, the firm’s asset value reached VND20.76 trillion ($912.09 million), down 6 per cent against the beginning of the year.

Meanwhile sales expense decreased by 13 per cent to VND594 billion ($26.18 million) due to decreases in expenditure for administrative and marketing programmes.

Along with the decline in profit, Sabeco’s share plunged after hitting the record VND334,500 ($14.69) in late November 2017. Notably, on May 4, Sabeco’s shares were at VND219,000 ($9.62).

Previously, the April 23 extraordinary general shareholders’ meeting voted to add three new foreign members to the management board, including one from Thai Beverage Public Co., Ltd.

The first is Koh Poh Tiong, chairman of Thai Beverage-owned Beer Group, which owns a 49 per cent stake in Vietnam Beverage.

This year, Sabeco estimated earnings of VND35.98 trillion ($1.58 billion) in revenue and VND4.8 trillion ($210.86 million) in after-tax profit, signifying increases of 4.4 and 2.2 per cent, respectively.

The others are Malcolm Tan Tiang Hing, CEO of Shanghai-based alcoholic beverages distributor Dxcel International, and Sunyaluck Chaikajornawat from Thai law firm Weerawong Chinnavat & Partners Ltd. They were elected as independent members.

Speaking at the meeting, Koh Poh Tiong stated that the new members will co-operate with the existing members to help Sabeco maintain its leading position in Vietnam. Besides, the new members will try to take the Sabeco and 333 Beer brands abroad. Singapore will be the first destination and the next stop Thailand, before other countries.

It will take massive funds to realise the above promise, which seems even more unlikely in light of the consecutive decreases in Sabeco’s profit.