SAB – Modest H1 2024 earnings growth – in line with our expectation – Earnings Flash
  • 2024-07-25T00:00:00
  • Company Research

* H1 2024 results: SAB announced its H1 2024 results with net revenue of VND15.3tn (USD598.8mn; +5% YoY) and NPAT-MI of VND2.2tn (USD88.1mn; +6% YoY). The decline in net revenue YoY in Q2 2024 dampened H1 2024 revenue growth despite strong revenue growth YoY in Q1 2024 (16% YoY growth mainly driven by the different timing of Lunar New Year in 2023 and 2024). However, H1 2024 NPAT-MI growth was mainly supported by the strict control of selling expenses despite SAB realizing high-cost raw materials and recording lower net financial income YoY. The results complete 47% and 50% of our respective full-year forecasts and are in line with our expectations. We thus see no significant risks to our 2024F forecasts, pending a more comprehensive review.

* Q2 2024 results: Net revenue decreased 3% YoY to VND8.1tn (USD317.1mn) in Q2 2024. Beer revenue improved 11% QoQ but still witnessed a YoY drop of 4%. We attribute weak revenue YoY in Q2 2024 to (1) subdued household spending and (2) maintained strict enforcement of drunk driving laws outweighing the positive impacts of a selling price hike in Q1 2024. Additionally, Q2 2024 NPAT-MI increased 8% YoY to VND1.2tn (USD49.0mn), driven by strict control of SG&A expenses despite the realization of high-cost raw materials and lower net financial income YoY.

* Profitability: Beer GPM slightly contracted to 33.8% in H1 2024 from 34.1% in H1 2023, which is mainly due to SAB continuing to realize high-cost raw materials. However, Q2 2024 beer GPM expanded by 1.5 ppts to 34.5% from a low base of 33.0% in Q1 2024. The blended EBIT margin expanded to 15.8% in H1 2024 from 13.7% in H1 2023, which is driven by strict control of SG&A expenses. Advertising & promotional (A&P) expenses/beer revenue declined to 7.7% in H1 2024 vs 9.5% in H1 2023, which is in line with management’s guidance for more selective spending on A&P activities in 2024.

SAB’s Q2 2024 & H1 2024 results 

VND bn

Q2 2024

YoY

H1 2024

YoY

H1 2024/

Vietcap's 2024F

Net revenue

8,086

-3%

15,270

5%

47%

 Beer revenue

7,059

-4%

13,446

4%

47%

 Others

1,028

7%

1,823

13%

46%

Gross profit

2,440

-2%

4,541

3%

47%

 Beer GP

2,434

-4%

4,544

3%

46%

 Other GP & sales deduction 

6

N.M.

-3

74%

4%

Selling expenses

-902

-23%

-1,744

-14%

39%

G&A expenses 

-176

-12%

-385

1%

45%

EBIT

1,362

21%

2,411

21%

55%

Net financial income

258

-23%

528

-22%

43%

Gain/loss from associates

28

-64%

17

-87%

7%

Net other income

-13

14%

-19

51%

55%

PBT

1,634

7%

2,937

6%

50%

NPAT-MI

1,248

8%

2,246

6%

50%

Blended GPM

30.2%

0.2 ppts

29.7%

-0.6 ppts

 

Beer GPM

34.5%

0.0 ppts

33.8%

-0.3 ppts

 

Blended EBIT margin

16.8%

3.4 ppts

15.8%

2.1 ppts

 

EBIT/beer revenue 

19.3%

4.0 ppts

17.9%

2.5 ppts

 

Blended NPAT-MI margin

15.4%

1.5 ppts

14.7%

0.1 ppts

 

Source: SAB, Vietcap

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