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Here’s How Thai Beverage Public Company Limited’s Spirits Business Performed In Its Latest Fiscal Year

Thai Beverage Public Company Limited (SGX: Y92) is a food & beverages company with four different business segments, namely, Spirits, Beer, Food, and Non-Alcoholic Beverages. The company is based in Thailand, and the country is also its key geographical market.

In late November, Thai Beverage reported its full year results for its fiscal year ended 30 September 2017 (FY2017).

Given that Thai Beverage has a number of business segments, I thought it will be useful to look at the performance of the company’s important business segments. In here, the focus is on the Spirits segment, which accounted for 57.5% of Thai Beverage’s total revenue in FY2017, and 89.6% of total net profit.

What the Spirits segment does

The Spirits segment is engaged mainly in the production and sale of spirits products under different brands. The company produces brown spirits, white spirits, and more. Thai Beverage has 18 distilleries that produce these sprits.

On October 2016, Thai Beverage made the decision to transfer its soda water business from its Non-Alcoholic Beverages segment to the Spirits segment. This was made to “recognise that the majority of consumers drink spirits mixed with soda water.”

The business performance in FY2017

The table below shows a condensed income statement for the Spirits segment in FY2017:


Source: Thai Beverage FY2017 full year earnings presentation

We can see that the Spirits segment had a steady performance in FY2017.

Revenue grew 2.6%, mainly driven by an increase in sales volume of spirits and soda water, which grew by 2.7% and 49.2%, respectively. The increase in spirits volume was due to customers stocking up ahead of an increase in excise taxes in Thailand. The jump in volume for the soda water business was the result of an introduction of a new product, the Rock Mountain soda water.

EBITDA (earnings before interest, taxes, depreciation, and amortization) and net profit were also up for the Spirits segment in FY2017, although there was a slight decline in the respective margins.

In sum, it was a good year for the Spirits business, with growth in volume, revenue, and profitability. A slight blemish came in the form of lower EBITDA and net profit margins.

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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.