Masan reports strong sales and earnings growth

Masan Group (HOSE: MSN) reported revenues of VND10,833 billion ($511 million) in the first nine months of 2014 (“9M2014”), up 44.3 per cent on year. Topline was supported by VND1,953 billion ($92.1 million) in revenues from the resources business as well as strong performance from the consumer business, enabled by new product launches across seasonings, convenience foods and beverages.

The group’s pro-forma operating EBITDA (Earnings before Interest, Depreciation and Tax) reached VND2,476 billion ($116.8 million) in 9M2014, up 72 per cent on year. Its margin profile has improved sharply, with operating EBITDA margin at 22.9 per cent in 9M2014 compared to 19.2 per cent in 9M2013. Cost reduction and productivity improvements in the consumer business resulted in gross margins of 43.6 per cent in 9M2014, up by 342 basis points against. 9M2013, while the resources business reported pro-forma EBITDA margins of 39.4 per cent in 9M2014.

With successful new product launches across seasonings, convenience foods and beverages, the group’s consumer business reported an 18 per cent, 13.1 per cent and 13.8 per cent yearly growth in sales, operating EBITDA and pro-forma net profit respectively in 9M2014. Vinacafe grew 34 per cent on year in 9M2014, with “Wake-Up” emerging as a strong brand. The consumer business continued deepening its distribution network with the growth of its beverage platform, making it one of the few companies with both a strong on and off-premise presence for food and beverages.

Masan’s Nui Phao mine achieved a significant milestone, with a positive contribution to net profit in 3Q2014. Another significant development was the completion of the drilling programme, which has resulted in the reserve life of the Nui Phao mine being extended by three years. The mine ramp-up is progressing well, achieving international benchmarks and securing a marquee customer base across continents for its products, including for value-added tungsten products through the joint venture with H.C. Starck.

The group’s pro-forma net profit after tax for 9M2014 was VND 1,015 billion ($48 million), down 18.8 per cent against 9M2013. Pro-forma net profits for 3Q2014 were at VND457 billion ($21.6 million), down 12.6 per cent from 3Q2013. While profits in 1H2014 were affected by interest and depreciation costs as Nui Phao started operations, the net profit trajectory has started to improve as Nui Phao has crossed net profit break-even levels.

Masan Consumer Corporation, a subsidiary of Masan Group, has announced that it will make a tender offer for up to 49 per cent of Cholimex Foods, through its wholly-owned subsidiary Masan Foods. Cholimex Foods has a strong growing sauces and condiments business and well-recognised brands.

Masan Group is one of Vietnam’s largest private sector companies focused on building market-leading businesses that capitalise on Vietnam’s structural consumption and resources stories. The group has a track record of actively building, acquiring and managing large-scale operating platforms, and is committed to being Vietnam’s local private sector champion in terms of scale, profitability and shareholder return and being the country’s growth partner and employer of choice.

RELATED CONTENTS:
	Masan plans $77m share buyback
	PENM Partners bullish on Vietnam and Masan
	Phu Yen Beer buy-out deepens Masan’s beverage influence
	Capital management is sweet for Masan
	Masan appoints Korean CEO
	Masan realignment aimed at consumption sector
	Masan ready to pour into domestic drinks market