Food and beverage giant Masan reports record first quarter earnings

By Dam Tuan   April 29, 2016 | 07:48 pm GMT+7

Masan Group Corporation achieved record sales and earnings in the first quarter of 2016, with earnings before interest, tax, depreciation and amortization (EBITDA) rising 75.5 percent compared to the same period last year.

According to a report issued by Masan on April 26, the group's EBITDA reached VND1.6 trillion (over $73 million) in the first quarter of 2016.

One of Vietnam’s largest private company's revenue grew nearly 2.5 times over same period last year. The report showed first quarter net sales of VND8.8 trillion ($394 million), a leap of 144.6 percent compared with the first quarter of 2015.

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Masan hit record sales and earnings thanks to the Tet holiday. Photo by VnExpress

Sales of branded food and beverages were flat due to an early Tet holiday, but they were offset by the company's beer business that delivered net sales growth of 163.7% compared to Q1 in 2015. Subsidiary Masan Resource achieved VND806 billion in net sales, similar to last year.

Masan Resources delivered 31.3% growth in EBITDA, benefitting from increased production of its new tungsten chemical processing facility and improved operational efficiency.

As of March 31, Masan’s cash, cash equivalent and interest bearing assets totaled VND12.6 trillion ($566 million). Including the upcoming balance of $450 million from Singha’s equity investment into the food and beverage business, Masan’s consolidated cash position will grow to over $1 billion. This cash is expected to be supported by up to US$450 million in EBITDA this year.

At its AGM on April 1, Masan Group’s shareholders approved a record net sales target of US$2 billion for 2016, approximately 40 percent higher than 2015.

Revenue growth forecast for 2016 comprises 20 percent annual growth on a like for like basis from the animal protein business, 50 percent growth in top line from the mineral resources and value-add processing platform, and 15-20 percent growth from branded food and beverage products, excluding any upside from the Singha partnership.

Through an auction process for strategic investors in March 2016, Masan’s subsidiary ANCO secured the right to acquire 14 percent of VISSAN, Vietnam’s largest branded fresh and processed meat company, with 2015 net sales of VND3.8 trillion. Partnering with VISSAN is consistent with Masan’s strategic mission and is a critical step to transforming and consolidating the animal protein space through brands, distribution and best-in-class practices.

Masan Group Corporation is one of Vietnam’s largest companies. The company is focused on the domestic consumption market and has built leading businesses in the branded food and beverage sector and in the animal nutrition value chain.

The company’s other businesses include Masan Resources, one of the world’s largest producers of tungsten and strategic industrial minerals, and an associate, Techcombank, a leading joint stock commercial bank in Vietnam.