Habeco sustains losses in first quarter from Decree 100 and COVID-19

Habeco reports bleak business in the first quarter of 2020

Habeco has published its consolida.ted financial report for the first quarter of this year. Accordingly, its net revenue was VND744 billion ($32.35 million), signifying a decrease of 51 per cent on-year. In addition, it reported loss of VND98.33 billion ($4.28 million) on-year.

Meanwhile, sales expenditures saw a light decrease of 3 per cent to VND185 billion ($8 million) while management costs increased by 4 per cent to VND81 billion ($3.5 million).

As of the first quarter of this year, the total assets were VND6.82 trillion ($296.5 million), down 12 per cent year-to-date. The value of unsold products hiked by 17.5 per cent to VND751 billion ($32.65 million).

Regarding Sabeco – Vietnam’s largest brewer – Bao Viet Securities (BVSC) believes that 2020 will be a challenging year for the company and has drawn up several scenarios for business in 2020, most of which suggest that revenue will decrease.

In a positive scenario of a 5 per cent increase in beer consumption, Sabeco can achieve a revenue of VND40 trillion ($1.74 billion) and profit of VND5.7 trillion ($247.83 million). In the worst-case scenario of a 20 per cent fall in beer consumption, Sabeco may post a revenue of VND31 trillion ($1.35 billion) and profit of VND4 trillion ($173.9 million), which is the lowest growth in the past three years.

According to BVSC, the two main sources of headwind this year will be Decree No.100/2019/ND-CP and the COVID-19 outbreak that slow down beer and alcohol consumption in Vietnam.

The latest report about the brewery industry by SSI Research also changed its view from neutral in 2020 to negative in the short term when predicting the impact of Decree 100 and the coronavirus outbreak.

“When the decree took effect, we warned that beer consumption would decrease considerably. With the coronavirus spread, consumers tend to spend less time on meetings, which will also cause adverse effects to the brewery industry, at least in the first quarter,” the report reads.