Consumers buy KIDO’s products at a supermarket. VNS Photo
Food producer KIDO Group (KDC) reports revenues of VND3.7 trillion (US$163 million) for the first half of this year, a 26 per cent year-on-year increase.
Gross profit for the period was VND669 billion ($29 million), up 5 per cent.
The company attributed the low profit growth to the low gross margin of the consolidated industrial, Vocarimex.
The company said the retail edible oil business would continue to pursue the strategy of premiumisation to drive both sales and profitability.
“The additional launches of new packaged products in the third and fourth quarter this year will also help drive operating efficiencies of the distribution business,” it said.
The wholesale edible oil business will leverage the solid infrastructure and scale advantage to increase sales, and gross profit will rise steadily as scale rises.
Operating costs have already fallen, and profitability would improve over time as scale grows, KDC predicted.
The second half would see higher revenues since it launched new products in June, it said.
From an operation perspective, the management would focus on tightening cost control and improve efficiency to increase margins, it said.
KDC member companies Tuong An Vegetable Oil Company (TAC) and Kido Food Company (KDF) also announced their first-half business results.
TAC reported a 5.9 per cent year-on-year rise in revenue to VND2 trillion ($87.7 million). Profit before tax was VND45 billion ($1.9 million).
Meanwhile, competition in the mass ice cream segment has affected the growth of KDF. But revenues from ice cream still grew at 1 per cent in the first half due to product premiumisation.
However, overall sales fell by 9.6 per cent to VND704 billion ($30.8 million) while profit before tax was VND52 billion ($2.3 million).
The company explained that the yoghurt business had been impacted by competition.
Increasing competition means it has to invest more and more in both research and development and expanding its distribution network to retain its leading position, it added. – VNS