Spirits drive ThaiBev FY profits higher - Just Drinks

Author: Chris Mercer | 1 March 2012

A strong performance from ThaiBev's spirits division helped lift the firm's net profits in 2011, despite losses in beer and soft drinks.

ThaiBev's spirits sales in the 12 months to the end of December increased by 10%, to THB84.8bn (US$2.75bn), with volumes up by 6%. The higher demand helped to push the unit's profits up by 13% on 2010, to THB13.3bn.?

Spirits were the bulwark for the Thailand-based drinks group against ongoing losses in beer, a swing to the red in soft drinks and profits erosion in its food business. ThaiBev's group net sales rose by 10% to THB132.2bn for the 12 months, with group net profits up by 12% to THB16.9bn.

Stonger overseas sales of Chang beer during the year were overshadowed by ongoing weak demand in Thailand. Group beer sales dropped by almost 6% in volume, although price increases mitigated the impact on net sales, which fell by 2.4% to THB32.8bn. The beer unit cut its net losses from 2010 by 37%, but remained THB1bn in the red.

In soft drinks, ThaiBev's sales jumped by 67% to THB10.9bn, but the group said it was aided by the acquisition of its domestic soft drinks rival, Serm Suk, in September. Sales of bottled water, Oishi green tea and energy drinks also performed well in the year. However, financing for the Serm Suk deal dragged ThaiBev's soft drinks unit to losses of THM447m, versus profits of THB369m a year earlier.

In food, ThaiBev's net sales rose by 13% to THB4.1bn, but net profits slid by a third on 2010, to THB107m, due to higher input costs and tax payments.

ThaiBev blamed the poor performance of some of its divisions on a difficult domestic operating environment. "The economy in 2011 experienced a marked slowdown compared to the previous year as the production sector faced supply disruption problems following Japan?s natural disaster in the first quarter of 2011, coupled with the severe and widespread floods? impact in the Central region," it said. Consumer demand for drinks mirrored the Thai economy, it added.

For the company announcement, click here. For the results presentation slides, click here.

Source: http://www.just-drinks.com/news/spirits-drive-thaibev-fy-profits-higher_id106477.aspx

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