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Thai Beverage Public Company Limited’s Annual Information Meeting: 13 Key Numbers Investors Should Know

Two weeks ago, Thai Beverage Public Company Limited  (SGX: Y92)  released presentation slides that were used at its recent annual information meeting.

There is much to learn about the food & beverage company’s business. The slide below, which shows the breakdown of Thai Beverage’s business in the quarter ended 31 December 2016 (1Q17), is a good place to start:

2017-02-24 Thai Beverage Slide 1
Source: Thai Beverage’s annual information meeting presentation

Thai Beverage has four business segments: Spirits, Beer, Non-alcoholic beverages, and Food.

The Spirits segment is the biggest revenue contributor in Thai Beverage, by far. The segment accounted for over 56% of Thai Beverage’s revenue in 1Q17. Meanwhile, the Beer segment was in second place with around 32% of total sales. Elsewhere, the Non-alcoholic beverages and Food segments made up 8.3% and 3.5%, respectively, of Thai Beverage’s total revenue.

The difference in contributions between the four segments become sharper when we look at the net profit picture.

Here, the Spirits segment dominates with a whopping 83.3% share of Thai Beverage’s net profit in 1Q17. Beer comes in second again, but ‘only’ with a 20.5% contribution; this percentage is noticeably lower than Beer’s revenue contribution. Together, it would not be wrong to say that the Spirits and Beer segments contribute all of Thai Beverage’s net profit in 1Q17.

For completeness, the Food segment’s profit-contribution is negligible at the moment. Meanwhile, the Non-alcoholic beverages segment lags the other three with losses posted in the reporting quarter.

Let’s look at other financial numbers next.

2017-02-24 Thai Beverage Slide 2
Source: Thai Beverage’s annual information meeting presentation

The current ratio is a measure of a company’s ability to pay its obligations that come due within a year. As such, generally speaking, a figure above 1 is desirable. Here, Thai Beverage scores a 1.53 as of 31 December 2016.

Another measure, the debt to equity ratio, provides a view on a company’s financial leverage. This ratio is calculated by dividing a company’s total liabilities by shareholders’ equity. In general, the lower the ratio is, the better it could be. Thai Beverage’s score is 0.33 for the debt to equity ratio, which suggests that the beverage provider employs leverage to grow its business, but not in an excessive way.

The third measure is the accounts receivable turnover. This measures the number of days it takes for a business to collect the money that it is owed by its customers. Thai Beverage’s score for this measure is 6 days, which is a relatively short period.

The final measure we will look at is the inventory turnover ratio. This measure provides the number of days it takes before a company’s inventory is sold. This provides an interesting view of the fulfilment dynamics of the different business segments under Thai Beverage.

For instance, the Spirits business had an inventory turnover of 56 days as of 31 December 2016, while the Beer segment had an inventory turnover of just 8 days. What this suggests is that Thai Beverage’s Spirits products are more profitable, but takes more time to be sold. To complete the picture, the Non-alcoholic beverages segment had a turnover of 24 days, while the Food segment’s turnover is just 2 days.

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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 contributor Chin Hui Leong doesn’t own shares in any companies mentioned.