This article was originally published on Thursday, 14 February 2019 at 18:55 SGT; it has since been updated.
Thai Beverage reported on Thursday its fiscal first quarter net profit rose 35.5 percent on-year to 7.48 billion Thai baht (S$242.24 million or US$238.6 million), excluding non-recurring year-ago expenses, as revenue from the spirits, F&N/FPL and food businesses all increased.
However, contributions from the non-alcoholic beverages business fell, it said.
Including the year-ago non-recurring expenses, net profit for the quarter would have risen 144.2 percent on-year, the company said. In the year-ago period, the company had a 2.46 billion baht cost relating to a business acquisition, the filing said.
Revenue from sales for the quarter ended 31 December increased 59.7 percent on-year to 72.63 billion baht, it said in a filing to SGX after the market close on Thursday.
CGS-CIMB had forecast fiscal first quarter revenue, including from SABECO, would come in at 68.3 billion Thai baht, with core net profit around 5.9 billion baht.
ThaiBev pointed to Thailand’s continued economic expansion during the quarter, driven by the tourism sector and rising private consumption.
“The domestic beverage market showed signs of recovery as private consumption picked up. This was partly due to an increase in farmers’ income levels and the government’s welfare cards policy that underpinned consumer purchasing power,” ThaiBev said.
“Moving forward, the campaigns ahead of the coming election in March 2019 are also expected to further stimulate the economy,” it added.
Spirits business rebounds
In the spirits business, sales revenue rose 28.6 percent on-year for the quarter to 31.68 billion baht, with total volume at 181.9 million liters, up 25.7 percent, Thai Beverage said. The segment’s net profit increased 41.5 percent on-year to 1.67 billion baht, it said.
The increase in spirits sales was largely on a combination of increasing customer purchasing power and against a low base in the year-ago quarter, when sales agents reduced their orders due to an excise tax hike, it said.
Beer net profit falls
The beer business saw sales revenue jump 128.6 percent on-year in the quarter to 33.00 billion baht, with total sales volume of beer, including Sabeco, at 731.8 million liters, up 253.9 percent on-year, it said.
The volume increase was driven by the inclusion of Sabeco this year, and excluding Sabeco, sales volume increased by 7.8 percent, it said.
However, net profit for the beer segment dropped 53.7 percent on-year to 410 million baht for the quarter, mainly on increased finance costs, as well as higher advertising, promotion and staff costs, it said.
Total finance costs for the quarter increased by 458 percent on-year to 1.77 billion baht, the filing said.
Non-alcoholic beverages see loss
The non-alcoholic beverages business saw sales revenue rise 1.1 percent on-year to 4.16 billion baht for the quarter, mainly on the product mix, ThaiBev said. Total sales volume for the segment was 422.2 million liters, up 3.6 percent on-year, it said.
However, the segment reported a net loss of 289 million baht, wider than the year ago loss, it said.
“This was mainly due to an increase in cost of sales which the key change was the new specific sugar tax and excise tax that fully impacted in this quarter compared with the first quarter of last year, and there was an increase in some material costs such as fructose sugar and preforms resin,” ThaiBev said.
The food business reported sales revenue of 3.82 billion baht, up 63.9 percent on-year on increased revenue from Spice of Asia and QSR of Asia as the number of stores rose, while net profit for the segment increased 11.5 percent on-year to 175 million baht, it said.
Correction: The volume of beer sold in the fiscal first quarter was 731.8 million liters, up 253.9 percent on-year, while net profit for the beer segment dropped 53.7 percent on-year to 410 million baht.