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Thai Beverage Public Company Limited’s Latest Earnings: Benefits Seen from One-Off Sale

Thai Beverage Public Company Limited (SGX: Y92), one of the largest food and beverage companies listed here in Singapore (and perhaps most well-known as the brewer of Chang beer), announced its fiscal third-quarter results yesterday evening. Here are the highlights.

The business and financial scoop

Thai Beverage recorded a 4.1% year-on-year climb in revenue to THB 121.2 billion for the first three-quarters of 2015. Profit grew much faster, at 34.4% to THB 20.4 billion, as a result of THB 3.8 billion in gains that came from its subsidiary Frasers Centrepoint Limited’s (SGX: TQ5) sale of a stake in Myanmar Brewery Limited, a beer brewer based in (you guessed it) Myanmar.

Consequently, Thai Beverage’s earnings per share was boosted to 0.81 baht, up 32.8% year-on-year.

Interestingly, even if the one-off gain was stripped away, Thai Beverage would have still experienced a healthy 10.6% increase in net profit from continuing operations to THB 16.6 billion for the first nine months of 2015.

In term of its various business segments, Thai Beverage continues to be dependent on its Spirits business. For the first nine months of 2015, the segment had contributed 63% of Thai Beverage’s overall revenue and more than 100% of profit; the non-alcoholic beverages segment was unprofitable for the quarter.

Moving on to the balance sheet, Thai Beverage’s net debt to equity ratio came in at 45% at end-2014 and had stayed stable at that level in the third-quarter of 2015. However, around 51% of Thai Beverage’s outstanding debt is due within a year. If the company is unable to refinance its borrowings at attractive rates, its profitability might suffer going forward.

What lies ahead

According to Thai Beverage’s management, the overall Thai economy had decelerated in the third-quarter of 2015.  Tourist arrivals to to the country had also slowed down due to the tragic Bangkok bombing incident in August this year.

All that said, there are still some bright spots in the Land of a Thousand Smiles. Thai Beverage feels that the depreciation of the Thai baht is a “positive factor for export and government’s monetary and fiscal policy since September 2015, and supporting the growth of [the] Thai economy in the rest of 2015 and 2016 going forward.”

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore writer Stanley Lim doesn't own shares in any company mentioned.