Inside a WinMart store. Despite challenging macro conditions, Masan achieved growth and advanced strategic initiatives with positive results in the first half of 2023. — Photo courtesy of Masan

Masan Group Corporation (HOSE: MSN) has released its unaudited financial results for the first half of 2023, with net revenue reaching VNĐ37.3 trillion (US$1.5 billion), an increase of 3.6 per cent versus VNĐ36 trillion ($1.5 billion) in the same period last year.

The CrownX (TCX), Masan’s integrated consumer-retail platform that consolidates WinCommerce (WCM) and Masan Consumer Holdings (MCH), reported revenue of VNĐ26.8 trillion ($1.1 billion) in H1 and VNĐ13.5 trillion ($569.2 million) in Q2, up 3.1 per cent and 7.6 per cent y-o-y, respectively.

TCX’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) was VNĐ3.5 trillion ($147.7 million) in H1 and VNĐ1.9 trillion ($80.2 million) in Q2, up 10.3 per cent and 28.3 per cent y-o-y, respectively.

Despite weakened consumer demand affecting sales productivity, WCM’s revenue recorded 1.5 per cent y-o-y growth in H1 and 2.5 per cent y-o-y growth in Q2 while profitability was largely protected.

WCM’s net revenue reached VNĐ14.5 trillion ($611.8 million) in H1 and nearly VNĐ7.2 trillion ($303.8 million) in Q2, up 1.5 per cent and 2.5 per cent y-o-y, respectively.

WCM opened 152 new WinMart+ and two new WinMart in the first six months of the year, totaling 3,511 locations nationwide for both minimarts and supermarkets by the end of June.

WCM continued to improve its gross profit margin to 24.8 per cent in Q2, a 270 percentage points (bps) increase from a margin of 22.1 per cent in Q1. As a result, its EBITDA margin increased 120 bps to 2.2 per cent in Q2 from 1 per cent in Q1. Notably, EBITDA margin in June 2023 reached 3.6 per cent, demonstrating a continual and strong profitability improvement trend despite store openings and weaker consumer demand.

WCM’s 106 WIN stores, where urban consumers can access 60 per cent+ daily consumption needs, grew sales by 4 per cent y-o-y, supporting the statement that this is the winning minimart model for urban areas.

MCH delivered net revenue of over VNĐ12.9 trillion ($544.5 million) in H1 and nearly VNĐ6.7 trillion ($282.8 million) in Q2, an increase of 4.7 per cent and 13 per cent y-o-y, respectively. On a like-for-like (LFL) basis, net revenue grew by 11.6 per cent in H1 and 21.7 per cent in Q2 y-o-y.

Seasonings, convenience foods, and home and personal care items (HPC) recorded revenue growth rates of 21.3 per cent, 7.8 per cent, and 52.1 per cent y-o-y growth rates, respectively, in H1.

MCH gross margin continuously expanded and achieved 45 per cent in Q2, up 530 bps from 39.7 per cent in Q2, 2022. Its EBITDA margin increased to 25 per cent in Q2, up 150 bps from 23.5 per cent in Q2, 2022.

Phúc Long Heritage (PLH) posted a 4.6 per cent y-o-y revenue decline in H1 with slower new store openings amidst a challenging F&B retail environment.

Consumers buy Masan’s MEATDeli chilled meat. Masan MeatLife’s revenue increased by 70.2 per cent in H1 thanks to higher topline across all segments and the addition of the processed meat segment. — Photo courtesy of Masan

Masan MeatLife's (MML) revenue increased by 70.2 per cent in H1 to reach VNĐ3.3 trillion ($139.4 million) thanks to higher topline growth across all segments and the addition of the processed meat segment.

For processed meat, revenue increased by 45.5 per cent to VNĐ1.1 trillion in H1, primarily driven by increased volume.

For branded meat, as MML closes the gap with wet markets via exclusive prices for WIN members, daily revenue for MML products in WCM’s outlets improved by 30 per cent to VNĐ1.55 million in June thanks to an increase in volume sold.

Masan High-Tech Materials (MHT) revenue declined 9.9 per cent in H1 due to subdued global demand for its products.

Techcombank (TCB), Masan’s associated company, contributed over VNĐ1.8 trillion ($75.9 million) in EBITDA in H1, a y-o-y decline of 23.4 per cent.

In the second quarter, challenging macro conditions continued to put a dent in both consumer and business confidence. Although Việt Nam’s GDP growth reached 4.1 per cent, an improvement from 3.3 per cent in Q1, it is still below the 6.5 per cent target level for full-year 2023. As a result, consumers and businesses continued to be cautious in H1.

Most FMCG and retail businesses in Việt Nam have seen a y-o-y decline in performance.

However, loosening monetary policy, together with supportive fiscal measures (increased public investments, VAT cuts, etc.), are expected to provide a strong foundation for improved economic conditions in the second half of the year.

“We are singularly focused on giving consumers what they want. Consumers are starting to recognise and reward us for our consumer-centric innovations – membership, retail formats, and FMCG products. I am sure we will see tailwinds in the second half of the year, which will set the growth foundation for 2024,” said Dr. Nguyễn Đăng Quang, chairman of Masan Group. — VNS