SAB - Earnings drop partly cushioned by solid net financial income

SAB announced Q3 2023 results with revenue of VND7.4tn (USD301mn; -11% QoQ & -14% YoY) and its NPAT-MI was VND1.0tn (USD42mn; -10% QoQ & -22% YoY).

In 9M 2023, revenue was VND21.9tn (USD892mn; -12% YoY) and NPAT-MI of VND3.2tn (USD129mn; -24% YoY) which fulfilled 67% and 65% of our respective full-year forecasts. As such, we see potential downside risk to our full-year projections, pending a more comprehensive review.

Beer revenue continued decreasing YoY in Q3 2023. We attribute the 13% YoY decrease in Q3 2023 to (1) weak beer demand resulting from tightened household spending for non-essential and out-of-house entertainment amid economic headwinds and (2) stricter enforcement of drunk driving laws. On a QoQ basis, beer revenue in Q3 2023 decreased by 9% as Q2 2023 was high base due to seasonal effects. As Q3 2023 results trailed our expectation therefore we see a downside to our forecasts.