Masan Group Corporation (HOSE: MSN), today reported its management accounts for the second quarter and first half of the financial year 2021, with higher earnings thanks to the soaring demand for essential products.
|Masan’s sole focus lies on serving consumers' daily needs |
Masan’s consolidated net revenue reached VND41.19 trillion ($1.79 billion) in the first half of the year, a 16.4 per cent on-year growth against last year, primarily due to strong double-digit organic growth in branded consumer and meat businesses, a 1.7-per-cent growth in modern retail in the second quarter, and a 137.6-per-cent revenue growth at Masan High-Tech Materials (MHT).
Accordingly, The CrownX, Masan’s integrated consumer-retail platform that consolidates VinCommerce (VCM) and Masan Consumer Holdings (MCH), delivered first-half earnings before interest, taxes, depreciation, and amortisation (EBITDA) in 2021 of VND2.85 trillion ($124.2 million), more than doubled compared to last year as the margin expanded to 11.2 per cent.
VCM delivered positive earnings before interest and taxes (EBIT) in June, with a 2.1-per-cent EBITDA margin for 1H2021 and management plans to achieve break-even EBIT in 3Q2021. New stores within the store-in-store pilot model have also been reaching breakeven faster.
MCH’s top and bottom-line grew 11.7 per cent and 21.9 per cent, respectively, validating the innovation platform and the fact that Masan’s products are essential to the daily lives of consumers.
Meanwhile, Masan MEATLife’s (MML) meat category has become a sizeable standalone business, contributing VND2 trillion ($87 million) in revenues and VND163 billion ($7.1 million) in EBITDA. The next milestone would be to deliver positive net profits, which MML's management believes will occur by the end of the year when it’s meat processing plants are expected to reach about 25-30 per cent of capacity utilisation.
MHT delivered VND2 billion ($87,000) in net profits in 2Q2021, a VND295 billion ($12.85 million) improvement over 1Q2021, driven by improving demand for MHT’s products and pricing for all segments. MHT's management believes tungsten prices will continue to rise in 2H2021, further improving the company's financial performance. About 68 per cent of MHT’s consolidated revenues in 1H2021 were generated by hi-tech chemical powders and related products, signifying the transition of MHT to an integrated global industrial player.
Techcombank (TCB), MSN’s associated company, delivered a profit-before-tax growth of 71.2 per cent and reached VND11.54 trillion ($500 million) in 1H2021.
|Masan’s integrated consumer-retail platform, The CrownX, consolidates VinCommerce |
In the first half of the year, consolidated EBITDA grew 84.1 per cent on-year, as its margin reached 16.7 per cent in 1H2021. Masan Group's EBITDA margins in 2Q2021 were higher versus than in 1Q2021, and are expected to expand further in 2H2021 as strategic investments made in the first half start to yield results.
Net profit after tax post minority interest (NPAT Post-MI) grew by 8.4 times in 1H2021 to VND979 billion ($42.60 million) compared to VND117 billion ($5.1 million) in 1H2020, driven by significantly better bottom-line results across all business segments.
Profit margin in 1H2021 was 2.4 per cent, due to significant turnaround in VCM’s profitability and improved EBITDA margins. However, it is offset by higher interest expenses as the company increased its borrowings to raise its stakes in The CrownX and VCM.
In the third quarter, MSN expects to deliver 20+ per cent topline growth and increase profit margins by two times compared to 3Q2020. Recurring profits are expected to grow faster, due to total commercial margins improvement at VCM, stable margins at MCH, increased profitability at MML and MHT, and earnings growth at TCB.
Chairman Dr. Nguyen Dang Quang commented, “I am extremely grateful for the thousands of Masaners who are making sacrifices every day to ensure that each and every VinMart is open to serve our consumers and that each essential product we produce is readily available. During these trying, emotional, and stressful times, we are committed to providing our people their daily needs to the best of our abilities and beyond. We will play our part to uplift the spirits of our people as Vietnam tackles this pandemic. We will keep going to deliver on our promise."