Vinamilk (VNM) sees revenue and profit both up despite COVID-19
Despite the impact of COVID-19, dairy producer Vinamilk’s total revenue and profit in the first half of 2020 still rose 3-7 per cent on-year, CEO Mai Kieu Lien said on Friday.
In the first six months of 2019, Vietnam Dairy Products JSC (Vinamilk) earned VND14.6 trillion worth of total revenue and VND2.9 trillion worth of profit.
Modest earnings growth this year was attributed to the downturn of income brought by the school milk programme as schools were shut to cope with the pandemic, Lien told the firm’s annual shareholder meeting.
"When schools re-opened in May, the situation became better but performance was still below the expectation," she said.
"Earnings may improve in the last two quarters of the year."
Vinamilk targets VND59.6 trillion in total revenue this year, up 5.7 per cent on-year, and profit is forecast to gain only 1 per cent on-year to VND10.69 trillion.
In the first quarter of 2020, Vinamilk reported total revenue rose 7 per cent on-year to VND14.2 trillion and profit was down slightly to VND2.78 trillion.
A 50 per cent cash dividend is set for 2020, divided into three separate tranches. Two advance tranches will be made in October 2020 and February 2021, with corresponding pay-out ratios of 20 per cent and 10 per cent. The schedule and pay-out ratio for the third tranche will be decided in the 2021 annual general meeting of shareholders.
The cash dividend pay-out rate for 2019 was 45 per cent.
The largest dairy producer by market value will also issue 348 million shares to shareholders this year at a five-to-one ratio, meaning every shareholder will receive one new share for every five shares they have.
The share issuance will raise Vinamilk’s charter capital by VND3.38 trillion to VND17.4 trillion.
A new cattle farm in Quang Ngai Province will come into operation this year and Vinamilk is planning to build more in Dong Nai Province, the centrally-run city of Can Tho, and Laos.
New products for dietary customers will also be studied and developed.
Vinamilk this year is planning to launch a coffee and dining store chain with the brand “Hi-Cafe”. A store was opened in 2019 at the firm’s headquarters in District 7, HCM City. The chain will be enlarged this year.
The chain would be developed based on Vinamilk’s milk retail system with 430 stores being allocated across the country, CEO Lien said.
Vinamilk and consumer staples firm Kido have recently announced a partnership deal that establishes a joint-venture business, in which Vinamilk holds 51 per cent of the capital.
Revenue of the joint-venture will be accounted by Vinamilk and Kido will enjoy the net profit on its part.
The joint-venture is expected to help both firms step in the beverage sector.
The two firms were hiring an independent auditor to value their products before the joint-venture begins operating, Lien said.