ThaiBev full year net profit down 46% at 18.53b baht

Singapore

SPIRITS maker Thai Beverage has posted a full year net profit of 18.53 billion baht (S$77 million) for 2018, down 46 per cent from last year, on the back of lower profits across its spirits, beer and non-alcoholic beverage businesses.

ThaiBev's basic and diluted earnings per share were 0.74 baht, down 46 per cent.

The company said that profits have been hampered by the slow economy and an increase in product prices after the implementation of higher excise tax rates at the end of 2017, as well as an elderly fund tax at the beginning of 2018, that reduced consumers' purchasing power, adversely affecting both the alcoholic and non-alcoholic beverage markets in Thailand.

Revenue for the year ended Sept 30 rose by 21 per cent to 229.7 billion baht. Spirits sales revenue dipped 3.1 per cent due to lower domestic purchasing power and higher purchase orders from agents and retailers before the excise tax increase. Coupled with increases in advertising and promotion expenses as well as personnel expenses, the spirits business' net profit decreased 13.2 per cent.

Net profit for beer also declined 10.4 per cent, weighed down by advertising and promotion expenses as well as personnel expenses, despite beer sales being boosted by Saigon Beer-Alcohol-Beverage Joint Stock Corp, or Sabeco. In the first quarter of the year, ThaiBev and a Vietnam partner had paid more than 109.97 trillion dong (S$6.53 billion) for a 53.59 per cent stake in Sabeco. ThaiBev said in its results release that Sabeco's profit more than offset the net finance cost from the acquisition.

The non-alcoholic beverages business similarly saw net loss widen to 1.24 billion baht, as sales revenue fell 3.5 per cent.

In contrast, the food business reported growth in sales revenue, driven by contributions from Spice of Asia and The QSR of Asia - ThaiBev's other acquisitions in the first quarter of the year. Food revenue jumped 96.8 per cent and net profit surged from 104 million baht a year earlier to 554 million baht.

ThaiBev has declared annual dividends for 2018 of 0.39 baht per share, down from 0.67 per share in 2017. After deducting an interim dividend paid out in June, the remaining dividend will be 0.24 baht per share.

The counter closed up 2.29 per cent at S$0.67 on Monday before the results were announced.