Thai Bev net profit down 62% in Q1

THAI spirits maker Thai Beverage has posted a first quarter net profit of 2.91 billion baht (S$122 million), down 62.3 per cent from the same period a year earlier.

The fall was largely due to non-recurring business acquisition costs of 2.35 billion from the four acquisitions it completed in the first quarter.

Chief among these, ThaiBev and a Vietnam partner paid more than 109.9 trillion dong (S$6.53 billion) for a 53.59 per cent stake in Saigon Beer-Alcohol-Beverage Joint Stock Corp, or Sabeco. Sabeco's results will be included in ThaiBev's from the second quarter onwards.

Net profit excluding the finance costs for Sabeco and other non-recurring expenses was 29.3 per cent lower at 5.48 billion baht. This translated into a 32 per cent dip in earnings per share from the same period a year ago to 0.21 baht.

Otherwise, ThaiBev's earnings per share was 0.12 baht, down 61 per cent.

Revenue in the three months to Dec 31 fell 2.6 per cent to 45.6 billion baht, as private consumption in the domestic beverage market increased at a slower-than-expected pace even after the official mourning period ended because the economy had not yet fully recovered, the group said.

Domestic alcohol beverage sales was also affected by destocking of sales agents' inventory.

Spirits sales revenue dipped 5.8 per cent despite an increase in sales volume due to a change in product mix, and net profit slumped 21.1 per cent to 4 billion baht.

Beer sales dipped 4 per cent while net profit slumped 29.7 per cent to 886 million, as advertising and promotion expenses as well as staff costs also rose.

Although total sales volume of beer was 206.8 million litres, a decrease of 6.2 per cent, ThaiBev said it maintained its share of the beer market.

Sales of non-alcoholic beverages business rose 5.8 per cent, narrowing the segment's net loss to 227 million baht, a 5 per cent improvement from a net loss of 239 million baht.

The food business reported growth in sales revenue and improvement in margin, driven by contribution from the acquisition of KFC stores.

Food revenue jumped 42.3 per cent and net profit surged from 5 million baht a year earlier to 109 million baht.

ThaiBev said it obtained bridging loans from various local and foreign banks to fund the acquisitions in the first quarter. It will manage to take out short term debts in the appropriate time, it added.

The counter closed unchanged at 91 Singapore cents on Wednesday before results were announced.