Company Quarterly Earnings Update – VNM VN – Q1 2022

Summary of the Q1/2022 results of Vinamilk JSC (VNM VN)

Q1/2022 Results: Highlights

  • Revenue rose 2% y/y to reach VND13,878bn, mainly due to: (1) a 4.3% growth in the domestic market to VND11,658bn, in line with the growth of total retail sales of consumer goods and services in Q1. This is further bolstered by the strong growth of “Giacmosuaviet” retail systems and the expansion of Moc Chau milk in the North (VNM’s indirect subsidiary), and (2) a 10.3% y/y increase in international markets to VND2,220bn, driven by Driftwood and Angkor milk (+27.8% y/y).
  • Net profit declined by 12.1% y/y to VND2,266bn, due to (1) a 9.7% increase in the average input material price, which was partially offset by a ~4% increase in average selling prices (ASPs), leading to a lower gross margin from 43.6% to 40.5%, (2) a 29.9% rise in transportation costs, accounting for 1.6% of revenue, due to a higher petroleum retail price, which is impacted by global oil price
  • 2022’s cash dividend is planned at VND3,850/share by the AGM. The 1st ­dividend of VND1,500/share will be paid on the 19th of August 2022.

Outlook 2022-2023

  • For 2022: Revenue will grow stronger during the last 9M thanks to a robust rebound in the F&B sector and the Out of Home channels due to a low base from these last years during the distancing and lockdown period, and full tourism reopening. Therefore, we maintain our revenue forecast of 11.0% y/y growth to VND67,615bn, specifically: domestic market (+10.6% y/y), direct export (+15.1% y/y), overseas subsidiaries (+10.0% y/y). Regarding net profit: VNM raised the ASP by ~4% as per our predictions to mitigate the impact of high input material prices. In 2022, we maintain our estimate of a 15% rise in the average input milk price for VNM. Accordingly, we expect net profit to grow slightly by 3.7% y/y to VND10,923bn.
  • For 2023: We expect revenue and net profit to grow by 5.9% y/y and 10.8% y/y, respectively, to VND71,605bn and VND12,108bn.


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