Habeco's profit is the 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 increased by more than 10% to nearly 1,320 billion VND. Subtracting the cost of goods sold, the company's gross profit was nearly 267 billion VND, an increase of 8.5%.

However, Habeco suffered a loss after tax of nearly VND21 billion, 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 its investment in marketing 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 number 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 38 billion VND in this item, 16% lower than the same period due to the decrease in mobilization interest rates. The company is depositing about 3,464 billion VND 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 tense market competition.

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 the market forecast still having many negative aspects, this year Habeco plans to have sales revenue of main products of about 6,543 billion VND and profit after tax of 202 billion VND, both lower than the results of the previous year. With the results of the first quarter, 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 proposed to adjust the special consumption tax rate on some items harmful to health, including alcohol and beer, which is expected 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 situation of joint ventures and associated companies.

Siddhartha

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