Vietnam: Sabeco shareholders decide to raise dividend payment despite drop in net profit last year

Shareholders in Saigon Beer-Alcohol-Beverage Corporation (Sabeco) have approved a plan to raise its dividend payment for 2018 from 35 to 50 percent, VNS/VNA reported on April 15.

The decision, announced at the annual shareholders’ meeting on April 12, caught investor attention due to the fact net profit declined 11 percent in 2018, its first drop since 2013.

Sabeco reported net revenue of 35.95 trillion VND (1.54 billion USD) in 2018, up 5 percent over 2018 and surpassing the yearly target by more than 2 percent. However, its profit after tax dropped 11 percent on-year to 4.4 trillion VND (roughly 189 million USD).

Sabeco witnessed big changes to its management board last year, with a representative of Vietnam Beverage, an indirect subsidiary of Thai Beverage (ThaiBev) controlled by tycoon Charoen Sirivadhanabhakdi, joining its executive board in the second quarter.

The company paid total 35-percent cash dividend last year worth more than 2.2 trillion VND, of which ThaiBev received 1.2 trillion VND. With the higher dividend rate, expected to pay this year, Sabeco will pay an additional 960 billion VND and ThaiBev will collect an extra 515 billion VND.

Sabeco’s undistributed profit was estimated at 6.7 trillion VND after the dividend payment, but the company still faced the risk of being forced to pay tax and fines worth 3.14 trillion VND from the HCM City Tax Department for violations.

Sabeco has set higher targets for 2019 with net revenue of 38.87 trillion VND (1.7 billion USD) and net profit of 4.7 trillion VND (202 million USD), up 7.5 percent and 6.7 percent year on-year, respectively.

Neo Gim Sion Bennett, Sabeco’s general director, has maintained a positive outlook for Vietnam’s beer market with a growth rate of 5 percent over the next five years.

Sabeco plans a 6-per-cent increase in output to more than 1.9 billion litres in 2019. Last year, nearly 1.8 billion litres of Sabeco’s beer were consumed, up 0.3 percent year-on-year.

The company said it will invest to raise the capacity of sales teams and distribution networks rather than applying discounts, emphasising the policy of maintaining stable prices throughout the system.

Sabeco is concentrating on the domestic market and will strengthen its brand before reaching out to the world, the company representative said at the meeting.

Regarding the intention of buying more shares in Sabeco, ThaiBev said it is satisfied with the current ownership and if more room is available, it will consider the move carefully.

Shares in Sabeco, with sticker SAB on the Ho Chi Minh Stock Exchange, are the most expensive shares nationwide, being traded at around 244,000 VND (10.48 USD) per share.

E-malt.com, the global information source for the brewing and malting industry professionals. The bi-weekly E-malt.com Newsletters feature latest industry news, statistics in graphs and tables, world barley and malt prices, and other relevant information. Click here to get full access to E-malt.com. If you are a Castle Malting client, you can get free access to E-malt.com website and publications. Contact us for more information at marketing@castlemalting.com .