Thai Beverage Public Company Limited – Two Things We Should Know About Its Beer 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 Beer business.

Here is its latest quarterly numbers.

Source: Thai Beverage Q3 FY2017 Result Presentation

Here, we can see that the Beer business reported decline in revenue and net profit on a year-on-year basis.

The decline in revenue was driven mainly by the reduction in sales volume of beer by 8.7% year-on-year, due to the mourning period in Thailand.

Moreover, net profit plunged, as a result of 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 Beer business.

The biggest costs as a percentage of revenue is excise tax, accounting for 57.7% of revenues.

To put the above into perspective, the total cost of producing and operating the beer business accounts for “only” 36% of revenues, while the bulk of the sales goes to government.

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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.