Saigon Beer maker profits lowest in six quarters

By Tat Dat   April 28, 2023 | 11:33 pm PT
Saigon Beer maker profits lowest in six quarters
Bottles of beer move along a production line at a factory of Saigon Beer Corporation (Sabeco) in Hanoi, Vietnam June 23, 2017. Photo by Reuters/Kham
Saigon Beer Alcohol Beverage Corporation (Sabeco) made profits of VND10 billion ($426,300) a day in the first quarter, but that was its lowest in the latest six quarters.

Its management said the market worsened after Lunar New Year as people refrained from drinking due to Decree 100, which severely penalizes drunk driving.

This caused a 15% year-on-year fall in revenues during the quarter to VND6.2 trillion. Inventories soared by 18% as a result to VND1 trillion.

Costs, especially of marketing and promotions, increased by 22%. However, with aggressive marketing, SAB managed to retain most of its pre-pandemic market share, Vietcombank Securities said.

Profits fell by 19% year-on-year to VND1 trillion.

The management said the market has great potential due to the "golden" demographics, rapid growth in incomes, demand for non-alcoholic beverages, and high export demand.

The company expects demand for sub-premium beers to rise, and set targets of 15% increase in revenues and 5% in profits this year to VND40.27 trillion and VND5.8 trillion. VCBS said marketing would play a huge role in driving demand.

Sabeco may not hike prices because costs of materials such as malt may already have peaked, and it is locked in fierce competition with Heineken, it said.

Product innovation and improvement would also be important to differentiate from competitors, it added.
SAB has expanded its portfolio by launching products with new flavors and changing packaging for existing brands to create a more premium image.

Sabeco also eyes the non-alcoholic beverages market, which it has yet to enter.

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