Vinamilk suffers 16% fall in net profit

Vinamilk suffers 16% fall in net profit

Vinamilk (VNM) achieved a net profit of nearly VND4.3 trillion (US$202.8 million) in the first nine months of this year, representing a 16-per cent year-on-year decline.

A report from HCM City Securities Company also revealed that Vinamilk's revenues increased by 12 per cent year-on-year, hitting VND25.6 trillion ($1.2 billion), while sales from domestic operations climbed by 8.6 per cent even as export turnover fell by 27 per cent.

However, the company's 70-per cent stake in US-based subsidiary Driftwood Dairy is expected to yield VND1.8 trillion ($84.9 million).

In the third quarter alone, the company's revenue was estimated at VND8.3 trillion ($391.5 million), a 7.8-per cent year-on-year increase but also a 6.3-per cent quarter-on-quarter decrease.

Gross profit margins in the third quarter increased slightly because of lower input costs and in spite of higher selling, general and administrative expenses.

HCM City Securities lowered its revenue forecast but maintained its profit forecast for this year. The brokerage company expects more prospects for Vinamilk next year as domestic demand could improve and gross domestic profit could rise if input prices continued to decline.

HCM City Securities also predicted Vinamilk's revenues to reach VND38.8 trillion ($1.8 billion) and profits to reach VND7.9 trillion ($372.6 million) next year.

Vinamilk is set to reach a deal this month which allows the group to buy material for next year's operation at $3,000 per tonne, or 24 per cent less than this year's cost.

Earnings per share in the fiscal year of 2015 is estimated at VND8,360 ($0.3), a 35.8-per cent increase. VNM share prices dropped by 1.9 per cent yesterday to VND106,000 ($5) per share. 

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