Vietnam’s top brewer Sabeco tops up profit goal for 2017

April 5, 2017 | 04:03 am PT
Vietnam’s top brewer Sabeco tops up profit goal for 2017
An image of a can of 333 beer is seen at the Sabeco office in Ho Chi Minh City. Photo by Reuters
The company expects its annual sales to rise 3 percent against last year.

Vietnam's biggest brewer Sabeco is aiming to push sales to more than 1.7 billion liters this year, an increase of 3 percent against 2016, in a bid to raise its annual revenue by 9 percent to VND34.5 trillion ($1.52 billion) and net profit by 1 percent to VND4.7 trillion ($207 million).

The state-owned company also plans to raise its dividend payments from 30 percent to 35 percent, as agreed by its board of director.

Those targets will be put on the table at a shareholder meeting on April 18.

Company bosses said that price cuts on ingredients, a preferential tax policy on malt and stable market growth in rural areas, where Sabeco is the most competitive, are the reasons for the more positive targets.

Sabeco, known for the Bia Saigon and 333 brands, is also preparing for fiercer competition on the domestic market following Belgium’s Anheuser-Busch InBev entry into the Vietnamese market.

With the special consumption tax on beer and wine raised from 55 percent to 60 percent on January 1 this year, and set to climb to 65 percent in 2018, as well as a labeling regulation that's still under discussion, Sabeco is concerned that the at production cost for each beer bottle will be rise by VND200.

In its financial statement released last month, the brewer reported VND30.66 trillion in revenue last year, up 13 percent from 2015, and a profit of VND4.6 trillion ($205 million), a 33 percent jump.

According to the Ho Chi Minh City Securities Corporation, Sabeco’s beer sales made up 43.3 percent of the domestic market share last year, a slight decrease compared to 43.9 percent of 2015. It predicted that the figure will edge up to 43.5 percent this year.

The trade ministry announced in August last year that it planned to sell its entire stake in Sabeco, according to a government report.

Under the plan, the ministry would have offered a 53.59 percent stake worth VND24.5 trillion ($1 billion) in 2016 before Sabeco made its market debut, and the remaining 36 percent stake worth VND16 trillion ($705 million) in 2017 after the listing.

However, due to delays, the trade ministry failed to sell its first Sabeco shares as planned.

Deputy Trade Minister Do Thang Hai told local media on Monday that over 641 million shares in Sabeco had been listed on HOSE on December 6 last year at a starting price of VND110,000 ($4.85) per share.

As of April 3, prices stood at VND200,400 ($8.8) per share.

Beer consumption in Vietnam rose 12 percent year-on-year to reach 3.8 billion liters in 2016, according to the trade ministry.

Vietnam is Asia’s third largest beer consumer by volume after China and Japan.

Industry experts expect annual growth of 4 to 5 percent over the next five years. The country’s annual beer output is forecast to hit 4.1 billion liters by 2020, according to government projections.

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