Company Quarterly Earnings Update – VNM VN – 2021 H1

Summary of the 2021 H1 results of Vinamilk JSC (VNM VN)

H1/2021 results: highlights

  • VNM’s consolidated net revenue reached VND28,906bn, a slight decrease of 2.5% y/y. Domestic revenue declined 4% y/y due to (1) a high base in H1/2020, (2) the dairy industry’s negative growth rate of 5% in key urban cities in the first 5M/2021, (3) the implementation of social distancing policies across several major cities in mid February and again at the start of May. On the other hand, international revenue increased by 6.8% y/y to VND4,476bn, thanks to a rebound in consumption in key export markets (Middle East, US, China, Cambodia).
  • Despite the company’s flexible and drastic business efforts: (1) lower SG&A expenses (-8.7% y/y), (2) a sharp decrease in interest expenses (-48% y/y), (3) an approximate 2% increase in sales prices; the sharp increase in input materials in H1/2021 as well as the expiration of several tax incentives resulted in a lower net profit (excluding minority interests) of VND5,410bn, a decrease of 7.3% y/y.
  • Strong financial health (cash and deposits are VND21,634bn accounting for 40.8% of total assets) and moderate leverage (D/E and D/A ratios of 0.3x and 0.2x, respectively).


  • For 2021, through the lens of the Covid-19 pandemic, VNM was able to respond promptly and adapt in order to preserve safe production (lowering SG&A expenses, hedging ingredient prices, increasing selling prices, boosting online selling channel), especially in the export sector, which thrived. We remain optimistic that this situation will be resolved by the end of Q3/2021. As a result, we forecast that 2021F net revenue will rise slightly by 2.7% y/y to VND61,275bn, and net profit will decline somewhat by 1.2% y/y to VND11,098bn.
  • For 2022, we anticipate that the domestic market will recover and develop, spearheaded by rural areas, and premium products in urban areas. Furthermore, the Filipino and Chinese markets will be the new driving forces contributing to the rise of export revenue. We also believe that the current increase in milk prices is simply a passing trend and should stabilize in 2022. Consequently, we forecast that 2022F net profit will increase by 6.9% y/y to VND11,863bn.

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