Habeco's profit is lowest in nearly 4 years

Spending more than 100 billion on advertising and promotion, Hanoi Beer lost 21 billion VND after tax in the first quarter of the year, the highest level in nearly 4 years.

According to the financial report of Hanoi Beer - Alcohol - Beverage Corporation (Habeco - BHN), revenue in the first quarter of the year increased by more than 10% to nearly VND 1,320 billion. After deducting the cost of goods sold, the company's gross profit was nearly VND 267 billion, up 8.5%.

However, Habeco lost nearly VND21 billion after tax, 5.7 times higher than the same period last year. After three quarters of good business, the company returned to its highest loss since the first quarter of 2020.

The negative profit comes from Hanoi Beer increasing investment in market activities. In the first three months of the year, sales expenses increased by 13%, to more than VND230 billion. The company spent over VND34 billion on sales staff costs, VND6 billion more than the same period. The most expensive cost was advertising, promotion and support costs, nearly VND105 billion, an increase of VND30 billion. This is also the largest figure among all of Habeco's business operating expenses.

In addition, the decline in financial revenue also affected the business results of the Northern beer company. During the period, BHN recorded nearly VND38 billion in this item, 16% lower than the same period due to the decrease in mobilization interest rates. The company is depositing about VND3,464 billion in the bank.

Hanoi Beer has to spend a lot on advertising and promotion in the context of strict management moves to reduce the harmful effects of beer and alcohol by the State. According to the Vietnam Beer - Alcohol - Beverage Association (VBA), the beer industry will decrease 11% in revenue and 23% in pre-tax profit in 2023 due to the alcohol concentration control policy in Decree 100. In addition, this sector is also affected by people tightening spending, increasing raw material prices and increasingly intense competition in the market.

A subsidiary of Habeco, Hanoi - Hai Duong Beer (HAD), reported a loss of more than VND1 billion, five times higher than the same period last year. HAD said this was the result of the increase in the USD exchange rate when purchasing raw materials, reduced consumption due to the weather, and the impact of Decree 100.

With many negative market forecasts, this year Habeco plans to have sales revenue of about 6,543 billion VND and after-tax profit of 202 billion VND, both lower than the results of the previous year. With the first quarter results, the company is still far from the above profit target.

Similarly, in the recent annual meeting, the leaders of Saigon Beer (Sabeco - SAB) said that people are still tightening their spending while input costs are high, Decree 100 is predicted to continue to hinder the recovery of the beer industry. In addition, the Ministry of Finance's proposal to adjust the special consumption tax rate on some items harmful to health, including alcohol and beer, is predicted to continue to be a significant pressure on businesses in the industry.

In the first quarter of the year, Sabeco recorded a profit of nearly VND1,024 billion due to unfavorable business conditions of joint ventures and associated companies.

Siddhartha

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