Hanoimilk and Moc Chau Milk's profits decline sharply
Moc Chau Dairy Cattle Breeding Joint Stock Company (stock code: MCM) has announced its business results for the second quarter of 2024. Of which, Moc Chau Milk recorded net revenue of VND 809 billion, up 2.4% over the same period. Excluding cost of goods sold, Moc Chau Milk earned VND 248.2 billion in gross profit, almost unchanged compared to the second quarter of 2023.
During the period, financial revenue decreased by 50.5% to VND21.6 billion, mainly due to a decrease in deposit interest, reaching only VND49.7 billion, while in the same period last year, the profit was VND73.5 billion.
In addition, the exchange rate difference profit was recorded at VND 16.6 million, a decrease of 96.1% compared to the figure of VND 432.5 million in the second quarter of 2023.
Expenses during the period remained almost unchanged, of which sales expenses reached VND194.1 billion, up 11.3%. On the contrary, business management expenses decreased slightly by 4% to VND9.3 billion.
As a result, Moc Chau Milk reported a 38.8% decrease in pre-tax profit compared to the same period last year, reaching VND64.7 billion. After deducting expenses, Moc Chau Milk recorded a profit after tax of VND56.3 billion, 39.1% lower than the same period last year.
In the first 6 months of 2024, Moc Chau Milk brought in 1,434 billion VND in net revenue, down 5.9% over the same period. Along with that, profit after tax also decreased by 45.2%, to 106.2 billion VND.
In 2024, Moc Chau Milk sets a business target with expected net revenue reaching more than 3,367 billion VND, an increase of 7% compared to 2023. Meanwhile, after-tax profit is expected to decrease by more than 11%, to 332 billion VND.
Thus, at the end of the first 6 months of 2024, Moc Chau Milk completed 42.6% of the revenue target and 32% of the profit plan.
As of June 30, 2024, Moc Chau Milk's total assets reached VND 2,607 billion, unchanged from the beginning of the year. Inventory increased by 39% to VND 260 billion, mainly due to finished product prices.
Previously, in the first quarter of 2024, Moc Chau Milk also reported a profit after tax of only VND 49.9 billion, down 50.8% over the same period. This was the lowest profit in the previous 12 quarters.
Moc Chau Milk reported a nearly 40% decrease in profit in the second quarter of 2024.
Moc Chau Milk was formerly a state-owned enterprise, established in 1958 under the name Moc Chau Military Farm. By 2016, the company had been fully equitized. Of which, 51% of the charter capital was owned by Vietnam Livestock Corporation (Vilico, code: VLC). Meanwhile, GTNFoods holds 74.5% of the charter capital at Vilico.
In December 2019, Vietnam Dairy Products Joint Stock Company (Vinamilk, code: VNM) increased its ownership ratio in GTNFoods from 43% to 75%. Thereby, Moc Chau Milk became a member unit of Vinamilk.
Currently, Moc Chau Milk has two major shareholders, Vilico with 59.3% ownership and Vinamilk with 8.85% ownership, the rest are small shareholders with 31.85%. Ms. Mai Kieu Lien - General Director and member of the Board of Directors of Vinamilk is holding the position of Chairwoman of the Board of Directors of Moc Chau Milk.
At the shareholders' meeting at the end of April, the company approved a plan to pay a 20% cash dividend, equivalent to 59% of after-tax profit. It is expected that the 2024 dividend will be at least 50% of after-tax profit.
Ms. Mai Kieu Lien, Chairwoman of the Board of Directors, said that the high dividend level demonstrates the company's commitment to investors and shareholders, maintaining a cash dividend policy. This year, Moc Chau Milk will improve the quality of raw milk, strengthen the distribution system, be flexible in production, and implement development investment projects.
Sharing the same situation of sharp decline in profits, Hanoi Milk Joint Stock Company (Hanoimilk, UPCoM: HNM) said that despite revenue growth, this enterprise still "reluctantly" reported a decline in profits. Accordingly, Hanoimilk's sales revenue in the second quarter of 2024 reached VND 180.8 billion, an increase of 7% over the same period in 2023.
After deducting cost of goods sold, the company recorded gross profit of VND32 billion, a slight increase of 3% compared to the beginning of the year.
During the period, due to the expenses arising compared to the beginning of the year, the company's profit was eroded to 9.4 billion VND, down 36% compared to the previous year.
Accumulated in the first 6 months of the year, Hanoimilk's net revenue reached 310 billion VND, a slight increase compared to the beginning of the year.
In 2024, Hanoimilk plans to achieve a revenue of VND800 billion and a pre-tax profit of VND48 billion. Thus, by the end of the first half of the year, the company had completed 38% of its revenue plan and 41% of its profit target.
Vietnam's milk market still has a lot of room for dairy businesses.
According to the forecast from the United States Department of Agriculture (USDA), total global milk powder production in 2024 will increase by 1.5% compared to 2023, reaching about 9.34 million tons. Meanwhile, global milk powder import demand is expected to decrease by 1.1%, to 2.49 million tons.
With global milk powder supplies expected to be in surplus this year and China reducing its imports of whole milk powder due to abundant domestic supply, many financial institutions believe that raw milk powder prices will remain low throughout the year.
This will help dairy manufacturers' gross profit margins continue to improve in 2024.
Vietnam only meets 40 - 50% of domestic milk demand, the domestic milk market's growth potential is still large.
Regarding the domestic dairy industry, Tien Phong Securities Company (TPS) believes that Vietnam can only meet 40-50% of domestic milk demand, the domestic milk market's growth potential is still large, but the domestic dairy industry is facing great competition from imported milk.
According to Euromonitor, the size of Vietnam's milk market is currently estimated at over VND135,000-150,000 billion. Of which, domestic production only meets 40-50% of domestic milk demand, the rest comes from imported milk.
Domestic milk production is about 1.8 billion liters of fresh milk and 144 million tons of powdered milk. Vietnam's milk import turnover is from 1.2 to 1.5 million USD/year. Of which, imports from New Zealand account for 28% and the US accounts for 18%. Most of the powdered milk imported into Vietnam is processed into reconstituted milk.
In terms of product segments, powdered milk and liquid milk account for nearly three-quarters of Vietnam's dairy market. Yogurt and drinking milk are the fastest growing with annual growth rates of 12% and 10% respectively, compared to powdered milk at 4%.
Besides, Vietnam's current per capita milk consumption is still low, about 27 liters/person/year compared to 35 liters/person/year in Thailand and 45 liters/person/year in Singapore in 2022.
According to Research and Markets' forecast, the average milk consumption per capita in Vietnam will reach 40 liters/person/year by 2030, equivalent to a compound growth rate of about 4% annually.
This shows that the Vietnamese milk market still has a lot of room for dairy businesses.
However, this unit believes that most of the raw materials for Vietnam's dairy industry are still imported mainly because Vietnam's soil and climate conditions are not favorable for dairy farming.
The number of large domestic milk producers is very small. Currently, Vietnam has over 200 dairy producers, but most of the milk is produced by large corporations such as Vinamilk (accounting for about 40% of the milk market share in 2022), Friesland Camina Vietnam (accounting for 18%), TH Food (11%), Vinasoy (7%) and Nestle Vietnam (7%)...
Source: https://danviet.vn/doanh-thu-tang-truong-vi-sao-loi-nhuan-cua-moc-chau-milk-va-hanoimilk-van-sut-giam-toi-hon-50-20240809165033264.htm
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