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The Good And Bad That Investors Should Know About Thai Beverage Public Company Limited’s Latest Quarterly Earnings

In mid-February, Thai Beverage Public Company Limited (SGX: Y92) reported its first quarter earnings for the financial year ending 30 September 2018 (FY18). As a quick introduction, Thai Beverage is a company operating in four different segments, namely, Spirits, Beer, Food, and Non-Alcoholic Beverages.

There are both positive and negative takeaways that investors may want to learn about. But first, let’s run through the company’s numbers.

The results

Here’s a condensed income statement from Thai Beverage for the first quarter of FY18:


Source: Thai Beverage FY18 first quarter earnings presentation

We can see that Thai Beverage began its latest fiscal year in a challenging business environment. The company’s revenue, EBITDA (earnings before interest, taxes, depreciation, and amortisation), net profit, adjusted net profit, EPS (earnings per share), and adjusted EPS all came in lower compared to the same quarter a year ago.

The negatives

Firstly, Thai Beverage’s Spirits and Beer segments delivered lower revenue in the reporting quarter compared to the same period a year ago. The Spirits segment went through a change in product mix, which dragged its revenue lower, while the Beer segment suffered from lower sales volume.

Secondly, the company’s EBITDA declined by 46.8% year-on-year to THB 5.6 billion. The aforementioned fall in revenues at the Spirits and Beer segments were culprits, along with non-recurring expenses related to acquisitions the company had made, most notably the purchase of a 53.59% stake in Vietnam-based beer brewer, Saigon Beer.

Thirdly, the Non-Alcoholic Beverages business remained in the red during the reporting quarter. The consolation here is that the segment’s net loss had improved from THB 239 million in the first quarter of FY17 to THB 227 million in the first quarter of FY18.

Lastly, the company’s balance sheet had weakened significantly compared to the previous sequential quarter. As of 31 December 2017, Thai Beverage’s net debt position came in at THB 213.0 billion, up from THB 30.7 billion on 30 September 2017.

The positives

Firstly, the Non-Alcoholic Beverages and Food segments saw their revenues grow year-on-year by 5.8% and 42.3%, respectively, in the reporting quarter.

Secondly, the same two segments above had seen improvements in their EBITDA and net profit margins when compared to a year ago.

Thirdly, the acquisitions of established businesses like Saigon Beer in Vietnam, and a chain of KFC restaurants in Thailand will provide new income sources for Thai Beverage.

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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.