Saigon – Tay Do Brewery Joint Stock Company (code STD) recently announced its financial report for the first quarter of 2024, indicating a decline of 18% in net revenue to 68 billion VND compared to the same period last year. Cost of goods sold recorded a smaller decline, leading to a 57% reduction in gross Profit to 4.5 billion VND. After deducting expenses, the brewery’s after-tax profit for the first quarter was only 350 million VND, a significant 93% decrease compared to the previous year.

Explaining the decline in business performance during Q1, STD reported a 20% reduction in Beer production and an 18% decline in beer consumption compared to Q1 2023. Despite implementing measures to reduce production, labor, and management costs, the sharp rise in input material costs resulted in a 93% drop in after-tax profit compared to Q1 2023.

Total assets as of the end of March 2024 amounted to 354 billion VND, representing a 12% decrease year-over-year. Cash and cash equivalents stood at nearly 180 billion VND, with over 173 billion VND held as bank deposits. Notably, the company reported a time deposit with a maturity exceeding one year, amounting to 25.7 billion VND.

For 2024, the company projects a 4% decrease in revenue to 305 billion VND and an 83% decline in after-tax profit to 2 billion VND compared to the same period last year. If the plan is executed successfully, this will be the year with the lowest profit in the company’s history.

The cautious plan for this year is set against a backdrop of anticipated challenges in business operations, including rising commodity prices, interest rates, and exchange rates amidst increasing global inflation. Furthermore, geopolitical tensions between Russia and Ukraine pose potential risks to the economy.

Additionally, STD acknowledged that the Law on Prevention and Control of Alcohol and Beer Harm and the regulations on administrative sanctions for traffic violations are gradually changing consumer behavior towards alcoholic products.

In 2023, the beer industry witnessed a significant decline in consumption due to reduced purchasing power. Stricter enforcement of blood alcohol concentration limits for drivers by authorities led to a considerable drop in revenue and profit for beer companies.

Specifically, in 2023, STD’s volume of consumed Lager beer cans reached only 68.2% of the planned target. Additionally, the consumption of bottled beverages reached only 83.85% of the target. Consequently, the company’s net revenue in 2023 was only 316 billion VND, a 21% decrease year-over-year. After-tax profit also declined by 33% to 12 billion VND.

Saigon – Tay Do Brewery Joint Stock Company is a manufacturer and distributor of beer products. The company specializes in producing beer and wort, with key products including 333 Beer, Saigon Export, and Saigon Lager.