Thailand: ThaiBev reports 20% increase in net profit for Q2 to March 2022

The improving Covid-19 situation in Thailand drove sales growth in all business segments said Thai Beverage (ThaiBev) in a bourse filing on Friday, May 13

Net profit for the second quarter ended Mar 31, 2022 was up 20 per cent to 7.1 billion baht (S$285.6 miilion), from 5.9 billion baht previously. The group’s revenue was up 11 per cent to 65.8 billion baht from S$59.5 billion baht previously.

Earnings per share for the quarter was up 17 per cent to 0.28 baht, up from 0.24 baht previously.

For H1 2022, the group declared an interim dividend per share of 0.15 baht, which is payable by Jun 10, 2022.

At a conference call on May 13 after the results were released, ThaiBev executives said that the increase in net profit was due to higher profits from its beer, non-alcoholic, as well as food businesses and their associated companies.

The increase in net profit in these segments partly offset the slight decrease in net profit of its spirits business.

Although the group’s spirits business recorded a 0.2 per cent increase in sales revenue to 29.1 billion baht for the quarter, as sales volume rose 4 per cent to 172 million litres, its net profit fell by 3 per cent to 5.5 million baht.

Despite the decrease profits, ThaiBev executives noted that the sales volume of spirits has been one of the highest since the company’s listing. However, higher cost from the raw materials used to make spirits impacted profits, and pressured ThaiBev to increase the prices of spirits during the first half of its fiscal year.

The price increase for its beer products are in the “low single digits”, while prices of spirits have gone up between 4 and 6 per cent, said ThaiBev executives.

The company was already mulling increasing the prices of its key products in its previous conference call, held in November last year, after the release of its 2021 full-year results.

Sales revenue for the group’s beer business was up 20.3 per cent to 28.5 billion baht in Q2 2022, while net profit soared 235 per cent to 4 million baht. The beer business showed “a satisfactory improvement” both in Thailand and Vietnam for the first half of 2022, the group noted.

In the first fiscal half of 2022 for the group, Thailand’s alcoholic and non-alcoholic beverage industry continued to recover as a result of the relaxation of pandemic control measures. While entertainment venues such as bars and clubs remain closed, they were able to convert temporarily into restaurants to serve alcohol under strict guidelines — resulting in an increase in beverage consumption and a year-on-year improvement in sales, the filing noted.

ThaiBev executives also said during the conference call that they expect sales of some of its products, including spirits, to pick up as the economy reopens and as more tourists return to Thailand. Pub and bar operators have also been lobbying the Thai government to allow them to open.

In addition, the pressure of higher raw material cost, particularly for molasses, might subside in the next few years.

That is because the crop yield for molasses, typically distilled to make rum, has gone up by around 40 per cent than the year before.

The molasses purchased this year, which is still being processed into finished products, has been lower than last year, said the executives.

Both the non-alcoholic beverages and food business segments also recorded increases in sales revenue in the quarter, reaching 4.2 billion baht, and 3.9 billion baht respectively.

For H1 2022, Thaibev reported a 1.4 billion baht increase in cash and cash at financial institutions from the previous fiscal half, taking the total cash and cash at financial institutions to 39.7 billion baht as at end-March 2022.

In the same half-year period, the group’s total assets fell marginally to 471.5 billion baht, while total liabilities fell 2.4 per cent to 256.1 billion baht.

ThaiBev’s shares closed up 1.5 per cent or S$0.01 on Friday at S$0.68, before the announcement.

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