The Hanoitimes - Hanoi Beer Alcohol Beverage (Habeco), Vietnam second largest domestic brewer set its pre-tax profit in 2018 at VND746 billion (US$32.6 million), down 11% compared to 2017.
The Hanoi-based brewer also plans to pay dividends up to 27.51% in 2017 and 23.41% in 2018, announced the company's document in prepared for its upcoming general meeting.
Following the document, Habeco set revenue target of VND8.9 trillion (US$389.3 million), up 13% year on year. According to Habeco's representative, the company is under fierce competition to maintain its shares in the beer market, along with increasing price in input materials.
Habeco projects profit down 11% in 2018.
The potential increase in excise tax and policies to restrict the use of alcohol beverage will continue having negative impact on Habeco's profit in 2018 and afterwards.
Danish brewer Carlsberg, currently the strategic investor of Habeco, has been negotiating for a majority holding in the brewer.
As Carlsberg has the right of first refusal, it is vital for the two sides to work out the deal before Habeco can proceed with the taking its shares to the stock market in 2018. The major hurdle in the negotiations is believed to be the high share price set by Habeco that exceeds Carlsberg's valuation.
The potential deal for a larger Habeco stake, according to Carlsberg, would be in line with the company's long-term investment ambitions in the Vietnamese brewing industry as a whole and its strategic investment in Habeco since 2008.
Last December, Vietnam Beverage, a unit of Thai Beverage, successfully acquired 53.59% Sabeco shares for US$4.8 billion. The deal represents the endorsement of the hard work that has gone into establishing the Sabeco and Habeco brands, as well as the potential for further development of the sector, said Carlsberg's representative to Hanoitimes.
The state's divestment from Sabeco and Habeco, thus, is expected to enable further investment into Vietnam's homegrown brands and position them to claim their place among the region's best and most appreciated beers.
"Carlsberg remains committed to working in good faith with the Government to accelerate its remaining divestment from Habeco and to achieve an outcome that is most beneficial for the Vietnamese people, especially the proud consumers of Hanoi beer," the Carlsberg representative concluded.
Habeco's net revenue and net interest income in 2017 are estimated at VND9.8 trillion (US$430 million) and VND751 billion (US$33 million), according to the company's latest financial statement.
As of the end of 2017, the total assets of Habeco were worth VND9.5 trillion (US$438 million), decreasing 2.5% compared to the year's beginning, VND5.2 trillion (US$228 million) of which were short-term assets and VND4.8 trillion (US$210 million) were long-term assets.
In 2017, beer consumption in Vietnam was estimated to be over 4 billion liters, up 260,000 liters (6%) over 2016, according to the Vietnam Beer Alcohol and Beverage Association (VBA).
This number is close to the target of 4.1 billion liters by 2020 set in the master plan for the development of the Vietnamese alcohol, beer, and beverages sector approved by MoIT, meaning each Vietnamese person will consume around 43 liters per year.
Sabeco, Vietnam's largest brewer with 40% of the beer market share, has produced 1.77 billion liters of beer alone, an increase of 6.6% year-on-year, while the second largest domestic brewer, Habeco (18% market share), brewed 657.6 million liters, down 6.5%.