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Thai Beverage Public Company Limited’s Latest Earnings: An Overview Of The The Non-Alcoholic Beverages 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 SpiritsBeer, and Food segments. In this article, I will be running through the Non-Alcoholic Beverages segment, which accounted for 7.2% of Thai Beverage’s total revenue in the second quarter of FY2018, but -4.8% of total net profit (the segment was loss-making).

What the Non-Alcoholic Beverages segment does

The Non-Alcoholic Beverages segment focuses on the production and sales of water, ready-to-drink coffee, energy drinks, green teas and more.

The financial performance

The table below shows a condensed income statement for the Non-Alcoholic Beverages segment for the second quarter of FY2018:

Source: Thai Beverage’s earnings presentation

We can see that the segment had a bad quarter. Revenue, EBITDA (earnings before interest, taxes, depreciation, and amortization), and net profit all deteriorated on a year-on-year basis. Thai Beverage attributed the decline in the segment’s revenue to a change in its sales mix, since its sales volume actually grew by 1.7% compared to a year ago. Similarly, the segment’s EBITDA and net profit were both negatively impacted by the change in its sales mix during the quarter.

Going forward, Thai Beverage will need to scale up the segment’s operations or improve its sales mix to turnaround the business.

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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.