Spirits, beer lead ThaiBev Q1 profit up by 10%

Singapore

THAI Beverage Public Co's net profit grew 10 per cent to 6.6 billion baht (S$260 million) in the first quarter as all key business segments saw higher sales, the beverage maker announced on Thursday.

Net profit for the three months ended March was 0.26 baht per share. ThaiBev shares closed at 74.5 Singapore cents on Thursday, up by 0.7 per cent or half a Singapore cent, before the results were announced.

Revenue rose 11 per cent to 45.7 billion baht during the quarter.

Sales of spirits grew 9.9 per cent to 29.6 billion baht and contributed net profit of 5.7 billion baht - a 7.2 per cent year-on-year increase - to ThaiBev's bottom line, as agents increased stockpiles in anticipation of a new rule in Thailand requiring alcohol producers and distributors to contribute to a National Sports Development Fund.

Beer revenue increased by 17.5 per cent to 10.5 billion baht on higher sales volumes. Softer raw material and packaging costs improved margins for beer, which saw net profit surge 41 per cent to 595 million baht.

Revenue from non-alcoholic drinks increased by 7.9 per cent to 4 billion baht. But the company spent heavily on the segment to push its 100Plus and Jubjai drinks, sending the business segment to a net loss of 369 million baht during the quarter. Food sales grew 8.2 per cent to 1.6 billion baht as the number of outlets and sale prices rose. But higher costs and weak economies led net profit for the segment to fall to 11 million baht.

"On the non-alcoholic beverage front, the business remained affected by intense competition and the private sector's cautious consumption, which posed a challenge to the non-alcoholic beverage business' operations," ThaiBev stated.

The company had 50.8 billion baht of current assets to 55.5 billion baht of current liabilities as at end-March 2015, a current ratio of 0.92 that marked a sharp drop from the year-ago ratio of 1.31.

That was a result of ThaiBev refinancing Singapore-dollar loans with short-term baht loans to address higher interest rates in Singapore and an appreciation of the baht against the Sing dollar. To raise the current ratio, ThaiBev will restructure 25 billion baht of short-term loans by June 2015 by taking on longer-term bills of exchange for the same amount, with due dates that fall from 2016 through 2018.