Back to Previous Page
Company Quarterly Earnings Update – SAB VN – 2021 9M
Summary of the 2021 9M results of Sabeco JSC (SAB VN)
9M/2021 results: Highlights
- SAB posted a total net revenue of VND17,370bn, a decrease of 13.6% y/y, primarily due to a decline in beer sales which accounted for 89.3% of total revenue. Beer’s sales volume fell by 47.8% y/y in Q3 because of (1) the COVID-19 lockdown for most of the quarter leading to almost no on-trade sales, (2) a drop in off-trade sales as the gradual vaccination rollout in Q3, caused people to avoid alcohol for health reasons, and (3) early logistics disruption as beer is classified as a non-essential product. As a result, beer revenue fell by 12.9% y/y in 9M/2021 to VND15,618bn. The remaining revenue from other products (soft drinks, alcohol, trading raw materials) dropped 18.7% y/y to VND1,870bn.
- Because of (1) a strong up-cycling trend of input materials (malt, aluminum), (2) a sharp decrease in the selling volume during the prolonged lockdown in Q3/2021, and (3) an adoption of the “3 on-site” model during the COVID-19 period, 9M/2021 net profit declined by 25.7% y/y to reach VND2,529bn, with a net margin of 14.6%.
- Financial health is solid (cash & deposits accounting for 65.8% of total assets), and leveraging is low (D/E and D/A ratios of 0.03x and 0.02x, respectively).
Outlook 2021-2022
- For 2021: based on GSO, a -10.4% y/y in consumer income in 9M/2021 and a -19.5% y/y in the October’s FMCG index due to COVID-19 are causing a weaker Q4 than previously predicted. Although HCM City and other Southern provinces have re-opened since October 1st restaurants can only serve alcohol in certain areas with a 50% capacity. In addition, while taxi and motorbike taxi operations are still restricted, the strict enforcement of drink driving penalties from early 2020 continue to burden the on-trade channel. As a result, we reduce our estimates for Q4’s beer sales volume by 17.1% to 383 mn liters (-6.5% y/y). We forecast 2021F net revenue to be VND24,734bn (-11.5% y/y), while net profit will be VND3,897bn (-21.1% y/y), with a net margin of 15.8%, significantly lower than the average decrease in revenue and profit of 22.1% and 65.6% y/y respectively, observed in regional beer brands during their unvaccinated period in 2020 (Vietnam has been severely affected in 2021 while nearby countries were in 2020 due to a lack of vaccination).
- For 2022: we estimate 2022F net revenue to be VND31,177bn (+26.1% y/y) and net profit to be VND4,726bn (+21.3% y/y). The key drivers are: (1) strong recovery of sales volumes vs the low base of 2021, (2) consumers switching to more affordable mid-priced and economy beers (SAB’s dominant segment) due to lower income.
Company ratings and target prices are accessible for clients only.
If you are interested in getting full access to our paid Primary Research Materials feel free to get in touch with us at your convenience.
Our team is actively covering 50 companies in the listed Vietnamese equity space for our clients.
Featured image credit: Internet
