THAILAND: ThaiBev profits up as consumers trade down
Thai Beverage Public Company (ThaiBev) has reported a slight increase in its nine-month net profits from normal operations, despite a fall in total sales revenues for the period.
The company benefitted in the first nine months of 2009 from domestic consumers trading down to locally-produced brands during the recession, it said today (11 November)
The company, which is Thailand's leading alcoholic beverage producer, reported total sales revenue of 75,904 million baht (US$2,280m), a slight decrease of 0.8% in comparison with the same period last year. Lower sales revenues from its beer business and no sales revenue from the industrial alcohol sector were blamed.
Net profits from normal operations came in higher at 7,715m baht, a 6.2% increase.
The company said that revenue from its spirits business increased to 49,595m baht for the first nine months of the year. The spirits revenue, which stemmed from a rise in spirits sales volume and price, resulted in an increase in the net profit of the spirits business to 8,364m baht.
Thapana Sirivadhanabhakdi, president and CEO of ThaiBev, said: "Due to the uncertain economic climate, we have seen a marked change in consumer preference as consumers switch from imported spirits to locally-produced ones. As a leading alcobev producer offering high-quality spirits at a more cost-effective option, we are well-positioned to capitalise on this shift in tastes."
Revenue from the beer business decreased 28.7% to 20,490m baht while revenue from the non-alcoholic beverage segment increased 21.5% to 3,610m baht for the period, led by an increase in Oishi's beverage sales.
Revenue from the food business rose 23.9% to 2,392m baht for, due to the increase in the number of branches and sales promotions. Currently, Oishi Group has 121 outlets in Thailand.
ThaiBev began a restructuring exercise in mid 2008, in order the company said, to reap greater efficiency from its dealer management system.
Updating on that process, Thapana said: "We made a conscious decision to restructure our distribution network and operations as we realised it necessary in allowing us to stay ahead of the game. While the exercise did cause a short term decline in beer sales, we expect a rise in spirits sales and continued profitability of the company as a whole."
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