SABECO (SAB) continues to fulfill dividend commitment
SABECO (SAB) continues to fulfill dividend commitment
With its potential in the consumer sector, annual cash flows, and large cash reserves, SABECO is one of the few companies on the Vietnamese stock exchanges to maintain annual dividends this year.
SABECO (HSX: SAB) has just announced to advance a cash dividend in 2021 at the rate of 20 per cent, paying VND2,000 (8.7 US cents)after each share. The last registration date is January 10, 2022, and the expected payment date is January 27, 2022. Thus, with 641.3 million shares outstanding, the company will pay a total of VND1.3 trillion ($56.5 million) to shareholders in the first payout phase in 2021.
Looking at the history of paying dividends in recent years, SABECO is a rare enterprise on the Vietnamese stock exchanges to maintain regular dividend payments. Specifically, in both 2019 and 2020, the company paid a dividend of 35 per cent, and the same payment is expected in 2021. Thus, the company's Board of Management maintains its dividend commitment to shareholders, in contrast to many listed companies that do not pay dividends or only pay dividends in shares.
SABECO produces and trades beers and alcohol. Currently, the company is the largest beer brand in Vietnam, operating 26 breweries across the country with a total production capacity of over 2 billion litres per year with many well-known brands in the country and overseas including 333, Saigon Special, Saigon Lager, and especially the newly-launched Lac Viet beer that has been received positively by consumers.
Thanks to the regular use of its products and popularity among consumers over the years, the company's operating cash flow has continuously remained positive. This allowed the company to pay regular dividends every year while accumulating large cash reserves.
Specifically, the main business cash flow has always been positive at VND4.5 trillion ($195.65 million) in 2018, VND5 trillion ($217.4 million) in 2019, VND4.13 trillion ($179.57 million) in 2020, and VND1.67 trillion ($72.6 million) in the first nine months of 2021. Thus, since 2018, the company's main business activities have generated accumulated cash flows of up to VND15.32 trillion ($666 million).
In addition to maintaining dividends for shareholders, as of September 30, 2021, the company owned up to VND18.65 trillion ($810.87 million) in cash and short-term financial investments, accounting for 65.6 per cent of total assets. Meanwhile, total short-term and long-term debts were only VND759.8 billion ($33 million), accounting for 2.67 per cent of its total capital.
SABECO's resumption along with the economic recovery
In the third quarter of 2021, SABECO reported VND4.3 trillion ($186.96 million) in total revenue and VND471.9 trillion ($20.5 million) in after-tax profit, equal to 53.2 and 32.1 per cent of the same period last year. However, gross profit margin improved from 69.3 to 73.3 per cent. Accumulated in the first nine months, the company recorded VND17.37 trillion ($755.2 million) in revenue, and VND2.53 trillion ($110 million) in after-tax profit, equaling 86.4 and 74.3 per cent on-year.
As explained by SABECO, the profit in the third quarter of 2021 was lower than last year due to the fourth wave of the COVID-19 pandemic along with social distancing, especially in Ho Chi Minh City and the southern provinces.
However, since the beginning of October 2021, Vietnam's economy has gradually re-opened thanks to the government's strategy to accelerate vaccination, the most difficult period has seemingly passed and it is time for businesses in the consumption sector to resume.
Ban Viet Securities forecast that the beer industry would gradually recover as takeaway sales were opened at the end of the third quarter and store sales will rebound as vaccine coverage increases.
In addition, SABECO has also strengthened its presence in convenience store chains, established its official stores at e-commerce sites, and launched limited-edition packaging products like Saigon Lager and Saigon Export.
With SABECO's efforts to anticipate opportunities for economic recovery, investors expect the company to enter a new growth phase from 2022.
