Masan’s core profit jumps by 57 per cent

Saturday, Feb 02, 2019 08:05

Masan Group Corporation’s core profit in 2018 surged by 57.1 per cent to VND3.478 trillion (US$151.2 million). — Photo courtesy of Masan

The Masan Group Corporation (Masan), which saw an increase of more than 57 per cent in profit last year, has set a target of double-digit growth for 2019.

Its profits totalled VND3.478 trillion (US$151.2 million) last year.

Masan launched its branded fresh meat platform “MEATDeli” in 2018, and shifted Masan Nutri-Science to a fast-moving consumer-goods (FMCG) business, driving long-term revenue and profitability growth across pig price cycles.

Masan expects net revenue growth of 18-30 per cent in the 2019 financial year.

“With the launch of MEATDeli, Masan Nutri-Science will become a branded FMCG business by converting the $10.2 billion pork meat market through setting the new standard for safe fresh and processed meat products,” said chairman and CEO Nguyen Dang Quang.

Masan Consumer, Masan’s key subsidiary, has achieved a new record for the business. Premium product sales in seasonings delivered growth of 40 per cent for the 2018 financial year and accounted for 10 per cent of the portfolio.

The seasonings portfolio’s net revenue grew by 34.9 per cent for the financial year and 25.5 per cent for the fourth quarter of 2018 against the same period in 2017, while convenience foods premium portfolio delivered 50 per cent growth for the financial year and represented 40 per cent of the group’s portfolio, up 29.3 per cent for the year, and 17.4 per cent for the fourth quarter of 2018 against the same period the previous year.

In the beverage segment, net revenue increased by 55.8 per cent in the fourth quarter of 2018 and 36.4 per cent for the 2018 financial year, led by energy drinks.

The energy drink segment grew by 60 per cent year-on-year due to the drink Wakeup 247, improved brand power, and more points of sales, from 75,000 last year to 160,000, as of the fourth quarter of 2018.

Instant coffee achieved VND643 billion ($28 million) in net revenue during the fourth quarter of 2018, up 3.8 per cent compared to the fourth quarter of 2017. For the full year, this segment achieved 11.5 per cent growth in net revenue.

In addition, beer underperformed against management expectations, net revenue in fourth quarter of 2018 dropped by 33.2 per cent year-on-year, and full year net revenue delivered 23.3 per cent growth.

In the fourth quarter of 2018, Masan Consumer built a dedicated sales force, key to scaling up the business this year.

Processed meat delivered 24.5 per cent growth in net revenue for the fourth quarter of 2018, but declined by 4.8 per cent for the 2018 financial year.

The first co-product launched with Jin-Ju in the fourth quarter of 2018, the “Ponnie”, a premium sausage brand, drove fourth quarter sales growth in 2018.

Driver of growth

The innovation pipeline to cater to Vietnamese tastes and preferences for 2019 will be key to driving business growth for Masan.

Masan Resource, another subsidiary of Masan, maintained a high growth momentum with net revenue growth of 47.4 per cent in the fourth quarter of 2018 and 27 per cent in the 2018 financial year.

Masan Resource recently acquired 49 per cent of HC Starck, and renamed it Masan Tungsten Limited Liability Company, contributing to the outstanding performance.

Masan Resource plans to increase capacity to 12,000 mtu, making it one of the world’s largest mid-stream tungsten producer.

In the new financial year, Masan expects to achieve net revenue of VND45.2-50 trillion ($1.26-2.18 billion), a growth of 18-31 per cent.

Masan Resource’s net revenue is expected to grow by 20-30 per cent. The feed business is expected to grow by 10-15 per cent.

Net revenue from fresh meat is expected to contribute 10 per cent of Masan Resource’ consolidated net revenue.

A key potential risk would be a pig disease outbreak, which would impact feed sales growth. — VNS

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