HCM City (VNS/VNA)🦋 – The SaigonBeer-Alcohol-Beverage Corporation (Sabeco) is targeting a lower post-tax profitin 2018 due to the increase of production costs and stronger competitiveness inthe industry.

Its management board said at thecompany’s annual shareholder meeting recently that it had cut its projectedpost-tax profit by 19 percent year on year to 4 trillion VND (178 million USD)in 2018. Its total revenue is forecast at 36trillion VND in 2018, up 2.4 percent from 2017, and a 35 percent dividendpayout, level to the previous year. In 2017, the company recorded 35trillion VND in total revenue and 4.95 trillion VND in post-tax profit. The2017 figures increased by 11.2 percent and 9.6 percent year on year,respectively. This was the first annualshareholder meeting after the Thai beer firm ThaiBev via its Vietnamese legalentity had spent around 5 billion VND to purchase 53 percent of capital inSabeco at the end of last year. Sabeco’s management board said thedomestic market was going to be tough in 2018 as competition among brewers inVietnam rises. Meanwhile, production cost was estimated to grow as inputmaterial prices were expected to increase due to bad weather conditions andseasonal changes. In addition, alcohol and beerproducts have been affected by a 5 percent increase in special consumption taxfrom the beginning of this year. The new rates for alcohol products range from35 percent to 65 percent and the rate for beer products is 65 percent. However, there are also advantagesfor Sabeco and the beer industry in 2018. According to studies of internationalorganisations, Vietnam is among rapidly developing economies with increasingper capita income, fast urbanisation and young population that accounts for 60percent of the country’s total. According to Sabeco’s managementboard, those will be the factors that are benefiting the local industry to growstrongly in coming years. At the moment, Vietnam ranks amongtop 10 countries with the largest beer production in the world, top among ASEANcountries with the highest consumption and ranks third in Asia in terms of percapita consumption with around 43 litres a year. With an annual growth rate of5 percent, Vietnam’s beer market will attract more and more foreign brewersfrom overseas, Sabeco said. Sabeco debuted on the HCM StockExchange with code SAB on December 6, 2016 at 128,280 VND (5.7 USD) per share.Its share price rose to the highest of 334,460 VND per share on November 29,2017 but has fallen 40 percent since then to end last week at 200,000 VND pershare.-VNS/ VNA