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

Two weeks ago, Thai Beverage Public Company Limited (SGX: Y92) released its second quarter earnings update for its fiscal year ending 30 September 2018 (FY2018).

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 Spirits and Beer 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 second quarter of FY2018, and 2.8% of total net profit. [Editor’s note: An article studying the Non-Alcoholic Beverages segment has been published. It can be found here.]

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 second quarter of FY2018:

Source: Thai Beverage earnings presentation

We can see that the Food segment delivered a strong performance in the reporting quarter. Revenue jumped by 107.7% mainly due to the acquisitions of the Spice of Asia and The QSR of Asia businesses. The former runs hotpot and Thai 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.

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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.