Thai Beverage Public Company Limited – Two Things To Know About Its Spirit Business

Thai Beverage Public Company Limited (SGX: Y92) operates in four different segments, namely, Spirits, Beer, Food, and Non-Alcoholic Beverages.

The company has recently reported its third-quarter 2017 results. In this article, we will look at two things about its Spirit business.

Here are its latest quarterly figures.

Source: Thai Beverage Q3 FY2017 Result Presentation

The Spirit business reported growth in revenue and net profit on a year-on-year basis.

The improvement in revenue is driven mainly through better sales volume of spirit and soda by 4.3% and 38%, respectively, on a year-on-year basis.

Yet, net profit grew at a slower rate, due to increases in advertising and promotion expenses.

Cost breakdown

Source: Thai Beverage Q3 FY2017 Result Presentation

The above is a quick breakdown of the cost structure of the Spirit business.

The biggest cost as a percentage of revenue is excise tax, accounting for 52.5% of revenue.

To put the above into perspective, the total cost of producing and operating the spirit business accounts for “only” 28.1% of the sales revenue, with the bulk of the sales revenue going to the authorities.

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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 Lawrence Nga doesn’t own shares in any companies mentioned.