Sabeco plans a profit of nearly 4,600 billion VND12/04/2022
Sabeco sets this year’s revenue and profit of 34,790 billion dong and 4,580 billion dong, up double digits, returning to approximately the level before Decree 100 was issued.
Both targets of Saigon Beer – Alcohol – Beverage Corporation (Sabeco – SAB) increased by 32% and 17% respectively over the previous year.
Sabeco’s expectation is not only to regain its own form but also to be the most active business plan in the beer industry. This year, Hanoi Wine and Beverage Joint Stock Company (Halico – HNR) hopes to grow in both revenue and profit but only slightly inched compared to the previous year.
While Hanoi Vodka producer may still lose nearly 25 billion dong this year. As for Hanoi Beer – Alcohol – Beverage Joint Stock Corporation (Habeco – BHN), two main targets are set to go backwards, especially after-tax profit is likely to decrease by 32%…
Sabeco’s management set a high target mainly based on the bright spot in the recovery of the beer business when tourism, restaurants and food services are stimulated. Saigon Beer also expects stability in production and business to exploit the domestic market with the purchasing power of tens of millions of people thanks to the well-controlled epidemic.
The report of Mirae Asset Vietnam Securities (MASVN) said that beverage is in the group of industries with opportunities for profit growth. The unit predicts that beverage consumption, especially alcoholic beverages, will not be disrupted by lockdowns like 2021. Furthermore, beverage consumption is likely to approach near pre-Covid-level levels- 19 when international tourism to Vietnam was officially resumed from March 15. However, the industry’s gross profit margin will decrease due to high prices of raw materials, including malt, flavoring, sugar, aluminum and plastic.
Last year, SAB recorded gross profit margin of the beer segment of over 33%, down slightly from the previous year despite the sharp increase in raw material prices. Bao Viet Securities (BVSC) believes that the above result is thanks to the company’s pre-fixing of prices, improving material consumption and product structure. Sabeco has had 2 price increases in 2021, the most recent being in December. BVSC predicts, this will help improve gross profit margin in 2022 compared to the last quarter of last year. However, with the current strong momentum of aluminum prices, BVSC cautiously forecasts that gross profit margin this year will decrease by 0.3% compared to the whole of 2021.
Compared to Sabeco’s plan, BVSC forecasts that the company’s revenue will grow at a lower rate and the parent company’s profit after tax will reach VND4,676 billion. This unit expects SAB’s beer volume to recover 20% and selling expenses to remain high to support revenue growth and maintain market share.
Setting positive goals, but the leadership of Saigon Beer still said that the industry is being heavily affected by two unprecedented problems, the pandemic and the strict regulations of the Government. While Covid-19 causes short-term damage, the law on alcohol harm prevention has a long-term impact.
Specifically, the beer production and trading industry still faces challenges due to rising input material prices, scarcity of goods, traffic congestion and high transportation costs. At the same time, the consumer market continues to face difficulties because Decree 100 and Decree 24 set stricter regulations on beer marketing and advertising. In addition, alcoholic beverages in Vietnam are subject to three taxes including import tax (about 5-80% depending on the type of trade agreement), value-added tax (10%) and special consumption tax (already paid). increased from 50% to 65% from 2018).
Sabeco predicts that demand for low-end beers will continue to grow. However, the trend of consumers shifting to lower segments due to incomes affected by the pandemic, may affect revenue in 2022. The company also anticipates a scenario of stiff competition from major competitors. brewers in the battle for market share.