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Thai Beverage Public Company Limited’s Latest Earnings: An Overview Of The Food Business

In mid February, Thai Beverage Public Company Limited (SGX: Y92) released its first quarter earnings update for its fiscal year ending 30 September 2018 (FY2018). The reporting period was from 1 October 2017 to 31 December 2017.

As a quick introduction, Thai Beverage is a company operating in four different segments, namely, Spirits, Beer, Food, and Non-Alcoholic Beverages. Given that the company has four different businesses, I thought it would be useful to have a look at the performance of the individual segments.

In previous articles, I had discussed the SpiritsBeer, and Non-Alcoholic Beverages segments. In this article, I will be running through the Food segment, which accounted for 5.1% of Thai Beverage’s total revenue in the first quarter of FY2018, and 2.3% of total net profit (the segment was loss-making).

What the Food segment does

The Food segment is involved with the running of restaurants in Thailand (covering Japanese and Thai cuisines, and more), and the manufacture and distribution of snacks and chilled/frozen foods.

The financial performance

The table below shows a condensed income statement for the Food segment for the first quarter of FY2018:


Source: Thai Beverage FY2017 first quarter earnings presentation

We can see that the Food segment delivered a strong performance in the reporting quarter. Revenue jumped by 42.3% mainly due to the acquisitions of Spice of Asia and The QSR of Asia. The former runs hotpot and Thai food restaurants, while the latter owns over 250 KFC stores in Thailand. The increase in revenue flowed through the segment’s income statement, resulting in huge jumps in EBITDA (earnings before interest, taxes, depreciation and amortisation) and net profit on a year-on-year basis.

In sum, the Food business had a good start to the fiscal year. Going forward, the inclusion of well established brands such as KFC would likely result in commendable results from the segment.

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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.