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Company Quarterly Earnings Update – VNM VN – 9M 2024
Summary of 9M/2024 results and outlook of Vinamilk JSC (VNM VN)
- Net revenue grew 3.5% y/y to VND46,306bn, with domestic sales contributing 82% and international sales of 18%. For local market, Q3’s revenue declined by 2.4% y/y due to Typhoon Yagi’s temporary impact in Northern Vietnam. Combined with H1’s positive results, 9M’s sales grew slightly by 1.1% vs. a slight decline of 1.1% of the local dairy market according to AC Nielsen. By product, fresh milk, yogurt, and nut-based drinks achieved double-digit growth, offsetting a decline in powder milk sales caused by lower birth rate. For the global market, net sales recorded a 15.7% y/y growth. VNM’s major global markets including Iraq, the U.S. and Cambodia posted strong gains while its recent entry into China, Philippines, and Pakistan remain small contributors.
- Net profit grew 11.0% y/y to VND7,269bn. Gross margin improved to 41.9% from 40.5%, driven by (1) lower average raw material costs mostly attributed to lower Skimmed Milk Powder and Whole Milk Powder prices and (2) higher global sales contribution (from 16.1% to 18.0%), which has higher margin. SG&A over net sales ratio rose slightly due to more promotions and online marketing activities for new product launches.
- Q4/2024 forecast: The post-Typhoon Yagi restocking from distributors, Q3’s new products launched, the rising demand for nut-based products combined with year-end holiday promotion and advertising activities (Christmas and New Year) will boost sales. Together with global markets’ momentum, Q4 sales are projected to grow . Profit-wise, low input material costs, and high growth in international sales will generally improve Q4’s gross margin.
- For 2025, net revenue is forecasted to be driven by rising urban demand for nut-based drinks and rural consumption expansion in fresh milk and yogurt. Global sales are projected to increase as Vinamilk’s new Asian markets (China, Philippines, and Pakistan) grow faster from the current low bases. Net profit is expected to be supported by higher-margin international sales, changes in product mixed toward premiumization, and cost efficiencies in raw milk sourcing.
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Featured image credit: https://www.vinamilk.com.vn/
