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.
How We Made an 88% Return in Just 19 Months!
Members of David Kuo’s personal investing club Stock Advisor Gold were recently rewarded with the biggest winner Motley Fool Singapore has seen to date In a special, 100% FREE report we’ve put together, we take you behind the scenes to show you exactly how we first uncovered this stock… every article and piece of research we released on it… and what ultimately led to our decision to SELL for an 88% gain. Click here to claim your copy now!
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.