Sabeco's Q3 earnings decline by 23%

Sabeco, the brewer of Vietnam’s popular Saigon Beer, experienced a significant decline in post-tax profit during the third quarter. The company’s profit plunged by 23% year-on-year, amounting to VND1.07 trillion ($43.54 million). This decrease can be attributed to intensified competition, rising expenses, and low demand in the market. Sabeco’s revenues also suffered, dropping by over 14% year-on-year to VND7.5 trillion.

As a result of economic uncertainties and various challenges, Sabeco struggled to make substantial cuts in management and sale expenses. In the first nine months of the year, the company’s post-tax profit dropped by 26% to VND3.3 trillion, while revenue fell by 12% to VND22.1 trillion. This means that by the end of September, Sabeco had only achieved 57% of its profit target for the year, with three months remaining in 2023.

Despite earlier expectations of a prosperous beer industry in Vietnam, Sabeco’s profits have been declining since the second quarter of last year. Vietcombank Securities predicts that the brewer will only see a 6% increase in revenue this year, falling short of its initial target of 15%. To address these challenges, Sabeco recently appointed Lester Tan Teck Chuan, a seasoned professional with 28 years of experience in the beer and beverage industry, as its new CEO.

Overall, Sabeco’s financial performance reflects the impact of increased competition, high input costs, and subdued demand in the market. The company will need to navigate these challenges strategically to achieve its profit targets and regain stability in the industry.