Vietnam. Impressive Q3 for Sabeco as listing on horizon

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The Saigon Alcohol Beer and Beverages Corporation (Sabeco) recorded impressive growth during the third quarter of 2016 as it nears a possible listing on the Ho Chi Minh Stock Exchange (HoSE) in the fourth quarter.

In early October its CEO, Mr. Le Hong Xanh, said the beer giant may be listed on HoSE in late November or early December, according to Reuters.

“The listing could be in late November or early December, according to the consulting contract and agreement, but how fast it is depends on many other factors, like transparency in management and other conditions like tax,” he was quoted as saying.

Along with the Hanoi Beer Alcohol and Beverages Corporation (Habeco), Sabeco has been equitized before, with the State selling 5 per cent to Dutch brewer Heineken in 2008. The State still holds 89.59 per cent, other shareholders 5 per cent, and its strategic investor Heineken 5 per cent.

The Ho Chi Minh City-based beer giant is one of the last profitable State-owned assets in which the government expects to divest its entire holding by 2017, worth an estimated $1.8 billion.

The government has said it wants to list Sabeco before selling 53.59 per cent this year and the remainder in 2017, but Mr. Xanh said all options for divestment are being considered and the government has yet to approve any particular course of action.

Net operating revenue reached VND7.64 trillion ($342.2 million) in the third quarter, up 3.6 times year-on-year, with gross profit at VND1.13 trillion ($50.6 million), up five times year-on-year, its third quarter financial statement revealed.

During the July-September period, revenue from financial activities were down 50 per cent, mainly because of lower dividends and attributable profit, to nearly VND541 billion ($24.2 million). Cost of goods sold increased significantly, from VND73 billion ($3.3 million) in the third quarter of 2015 to VND119 billion ($5.3 million) in the third quarter of this year.

Administrative expenses also increased 21 per cent year-on-year, to nearly VND69 billion ($3.1 million). During the July-September period, after-tax profit reached more than VND1.23 trillion ($55 million), up 6 per cent year-on-year.

Total revenue stood at VND22 trillion ($985.44 million) with after-tax profit at VND3.2 trillion ($143.3 million), up 6.4 per cent year-on-year. Its assets totaled VND11.13 trillion ($498.5 million) as at September 30. Cash and cash equivalents were nearly VND5.76 trillion ($258 million), short-term financial investments more than VND3.09 trillion ($138.4 million), and accounts receivable VND1.99 trillion ($89.1 million).

Sabeco is a non-borrowing enterprise. Its short-term payables stood at VND4.06 trillion ($181.85 million) as at September 30 and mainly comprised trade creditors and provisions for payables.

Several major foreign brewers have been eyeing Sabeco since the government first earmarked it for equitization, but potential partners keen to exploit changing lifestyles and a fast-growing middle class have faced repeated delays.

Foreign brewers from Europe and Asia, including Japan’s Kirin Holdings and Asahi Group Holdings, Thai Beverage, and Heineken had previously expressed an interest in the stake sale. But Mr. Xanh said the process has restarted and interested buyers would have to bid again, declining to name any specific investors, according to Reuters.

Sabeco is owned and under the authority of the Ministry of Industry and Trade (MoIT) with brands such as Saigon Beer and 333 Beer. With a leading 43 per cent share in Vietnam’s beer production, net profit jumped 27 per cent in the first half of 2016 to VND2.39 trillion ($107 million), and its CEO forecast that full-year profit may grow 14 per cent.