ThaiBev reports fiscal 3Q net profit drops 57 percent as non-alcoholic beverage losses widen

Thai baht notesThai baht notes

Thai Beverage reported on Tuesday that its fiscal third quarter net profit fell 56.5 percent on-year to 8.646 billion Thai baht amid a lower contribution from the spirits business, a wider net loss from the non-alcoholic beverage business, a sharp decrease in contribution from F&N/FPL and the lack of year-earlier fair valuation gains.

Revenue from sales and services for the quarter ended 30 June was up 34 percent on-year at 60.71 billion baht, Thai Beverage said in a filing to SGX after the market close on Tuesday.

It attributed the revenue rise to a 105.2 percent increase in the beer business’ sales, a 109.7 percent increase in the food business’ sales, offset by a 3.3 percent decline in the spirits business’ sales and a 2.7 percent decline in the non-alcoholic beverage business’ sales.

Attributable profit to shareholders fell 60.7 percent on-year in the quarter to 5.991 billion baht, it said.

The year-earlier fair valuation gain on a financial asset was 8.498 billion baht, it said.

The spirits business saw net profit of 4.016 billion baht in the quarter, down 15.6 percent on-year amid an increase in advertising, promotion expenses and staff costs and lower sales volume, ThaiBev said.

The beer business had net profit of 1.006 billion baht for the fiscal third quarter, up 66 percent on-year amid an increase in sales volume, which rose 223.7 percent on-year to 664.7 million liters, including Sabeco’s beer, ThaiBev said. ThaiBev acquired a 53.59 percent interest in Vietnam-based beer-maker Sabeco in December, it noted. Excluding Sabeco, beer sales volume was 187.0 million liters, down 8.9 percent, it said.

The non-alcoholic beverage business posted a net loss of 286 million baht, wider than the year-earlier loss of 215 million baht on a change in product mix and lower sales volume, it said. Sales volume of ready-to-drink tea fell 17.9 percent on-year 12.7 million liters, Jubjai sales volume fell 25.2 percent on-year to 2.9 million liters, energy drink sales volume fell 21.9 percent on-year to 300,000 liters and Lipton sales volume fell 51.9 percent on-year to 1.1 million liters, it said.

That was partly offset by carbonated soft drink sales’ 2.1 percent on-year increase to 1.5 million liters and 100 plus sales volume rising 13.7 percent on-year to 300,000 liters, and drinking water sales volume rising 5.4 percent to 14.9 million liters, it said.

The net profit of the food business was steady around 32 million baht in the quarter, although the segment’s sales revenue rose 109.7 percent on-year to 3.62 billion baht, mainly due an increase in the number of Spice of Asia and the QSR of Asia restaurants, ThaiBev said.

For the nine-month period ended 30 June, net profit fell 42.3 percent on-yea to 17.098 billion baht, while revenue from sales and services rose 22 percent on-year to 173.92 billion baht, ThaiBev said.

In its outlook statement, ThaiBev pointed to economic concerns for the Thai economy, noting that while household income was likely to recovery, household expenditure mainly came from high-income households, with the purchasing power of middle-to-low income households remaining weak.

“Household debt has risen significantly and remains at high levels, thereby pressuring the consumers to be even more cautious with their spending. Given these Thai economic fundamentals, the domestic beverage industry continued to face challenges during the quarter,” ThaiBev said.

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