Profit expected to decrease by 39% because of COVID-19 and Decree 100, Sabeco still plans to pay 35% dividend
Being in the grip of being affected by COVID-19 disease and under the influence of Decree 100, Sabeco made its forecast of business results in 2020 not very optimistic with after-tax profit falling 39%.
Specifically, according to the meeting document of the General Meeting of Shareholders recently announced by Vietnam Beer – Alcohol – Beverage Corporation (Sabeco – Code: SAB), in 2020, the company targets revenue of VND 23,800 billion and profit after tax. 3,252 billion dong, down 37% and 39% respectively compared to the results in 2019.
Business plan for 2020. Source: Documents of Shareholders Meeting
This negative growth was made by Sabeco in the context of continuous difficulties in the beer market. In 2020, Decree 100/2014 / ND-CP and Decree No. 24/2020 / ND-CP impose stricter regulations on beer marketing and advertising, as well as impose heavier sanctions when participating in driving vehicles under the influence of alcohol.
Besides, COVID-19 dealt a blow to the entire economy, of which the brewing industry was no exception. The Board of Directors said, “According to the General Statistics Office, the Vietnamese beer industry is experiencing two negative effects, resulting in a 18.9% drop in output compared to the same period last year.”
Particularly in the first quarter of 2020, Sabeco recorded net revenue and net profit of VND 4,909 billion and VND 717 billion, down 47.4% and 44.4%, respectively.
Although forecasting this year’s business results will decline, the Board of Directors still presents shareholders a plan to pay 35% dividend in 2020. This dividend will also be applied in the profit distribution plan in 2019.
Profit distribution plan for 2019-2020. Source: Documents of the General Meeting of Shareholders
In 2020 Sabeco will focus its resources on branding and market development activities, increasing and effectively supporting channel control and product segmentation.
In addition, Sabeco will also carry out reforms to increase investment efficiency, reduce operating costs, to increase productivity.
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