Sabeco (SAB) CEO bemoans tough six months
The first half of this year was the toughest time for the Saigon Beer-Alcohol-Beverage Corporation (Sabeco) as the brewer suffered losses due to rumours and policy changes, executives said on Tuesday.
The company has encountered difficulties since stronger penalties on drinking drivers and tightened beer advertising rules were issued in January and February, CEO Neo Gim Siong Bennett said at the annual shareholders’ meeting.
In addition, the COVID-19 pandemic has ravaged the domestic economy, downsizing the tourism sector and closing entertainment facilities where alcohol is consumed the most, he said.
According to the General Statistics Office, the total production of the beer and alcohol industry dropped 19 per cent year-on-year in the first six months.
Sabeco has had to shut down some of its plants, suspended the expansion of the Cu Chi plant, which was almost complete, and cut non-core expenses, the CEO added.
Takeaways have been encouraged while inventory management processes have been overhauled to assure the quality of the stockpiled beer, he said.
Cost-cutting helped Sabeco earn a profit in the first six months despite the drop in sales revenue, he added.
The company has also lost some of its market share to competitors due to rumours and speculation, the CEO said.
The Government should issue a regulation to strictly deal with those who spread bad news as it could kill a business, he said.
Total revenue is forecast to drop 37 per cent year-on-year to VND23.8 trillion (US$1.03 billion) and post-tax profit is projected to slip 39 per cent year-on-year to VND3.25 trillion in 2020.
In the first three months, total revenue lost 47 per cent on-year to VND4.9 trillion and post-tax profit was down 44 per cent year-on-year to VND717 billion.
The Sabeco CEO reported sales in May and June improved significantly as social distancing was eased and Viet Nam had done well to contain the spread of the coronavirus, making people willing to go out and consume food and drink.
Second-quarter earnings will be released later this month, the CEO said, adding that earnings targets this year may be beaten.
Sabeco shares (HoSE: SAB) jumped 3.8 per cent to end Wednesday at VND163,000 apiece.