Habeco profit and revenue still on the downslope

Habeco has yet to see the light at the end of the tunnel

According to the corporation’s financial report in the third quarter of this year, Habeco earned VND3 trillion ($131.8 million) in revenue and VND317 billion ($13.9 million) in after-tax profit, signifying decreases of 18 and 27 per cent, respectively, the greatest plunge this year.

Notably, in the nine months of this year, Habeco’s revenue decreased to VND7.2 trillion ($316.3 million) and after-tax profit decreased by 17 per cent, to VND613 billion ($26.9 million).

Explaining this decrease, Vuong Toan, deputy general director of Habeco, said both Habeco and its subsidiaries reported lower consumption volumes.

Besides, Habeco faces heavyweight breweries, while increasing reserve expenditure also had a marked impact on consolidated business results.

Especially, within these nine months, Habeco spent VND327 billion ($14.4 million) on advertisement and promotion programmes. In the third quarter alone, the figure was VND104 billion ($4.6 million), meaning that the corporation poured an average of VND1.2 billion ($52,711) into advertisement and promotion programmes per day. However, even this failed to pull revenue and after-tax profit.

Along with the bleak business results, Habeco is losing its share of the beer market to strong competitors. It saw a decrease of market share for the sixth consecutive year. Accordingly, the corporation’s market share declined to 18 from 20 per cent in 2010.

Previously, in early 2017, Habeco’s released financial report put the company’s 2016 pre-tax consolidated profit at the bottom of the last seven years.

Notably, Habeco’s 2016 pre-tax profit was only VND997 billion ($44 million) from a revenue of VND10.3 trillion ($461 million). By contrast, Sabeco has confirmed a new pre-tax profit record of VND5.707 trillion ($252 million) from a revenue of VND30.642 trillion ($1.352 trillion).

Headquartered at 183 Hoang Hoa Tham Street in Hanoi, Habeco has chartered capital of VND2.3 trillion ($102.8 million). It produces and sells beer as well as alcoholic and soft drinks. Aside from foreign brands, Habeco’s chartered capital, total assets, and shareholders' equity is only second to Sabeco.

The Ministry of Industry and Trade currently holds 81.79 per cent in Habeco, while Carlsberg holds 17.34 per cent, and Carlsberg Trading Co., Ltd. 0.15 per cent. The corporation hoped that Carlsberg’s investment would bring much-needed support in human resources, technology, equipment, market expansion, and business administration. However, Habeco’s recent results show that the deal might not have lived up to expectations.

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