Thai Beverage Public Company has reported a slight increase in its revenue for the nine months ended June. However, higher operating costs, specifically for its beer and foods businesses, caused an overall decline in its Ebitda.
For its 9MFY2023, total revenue was up 3.8% y-o-y to 215.9 billion baht. However, Ebitda for the same period was down 3.4% y-o-y to 37.8 billion baht, says the company in its business update on Aug 9.
The Thailand-based, Singapore-listed company operates four main businesses. It is one of the component stocks of the Straits Times Index.
Its spirits business generated a 3.3% increase in revenue to 93.7 billion baht, even though sales volume dropped by 3.5%. This business managed to improve its Ebitda margin from 24.7% to 25.4% and its Ebitda reached 23.8 billion baht.
"The margin expansion was driven by price adjustment and changes in the portfolio mix in Thailand amid higher consumption of brown spirits. The international business, including Myanmar, has also reported a strong performance with increases in both sales revenue and EBITDA," the company says.
The second largest revenue contributor, the beer business, managed to increase its revenue by 0.7% to 93.3 billion baht, even as total sales volume declined 5.2%.
However, heftier brand investment, marketing activities and competitive pressures, coupled with rising key raw material and packaging costs, caused the Ebitda for beer to drop by nearly a fifth, of 19.8% y-o-y, to 10.8 billion baht.
Thai Beverage owns a portfolio of non-alcoholic drinks businesses too. Revenue jumped by 15.6% y-o-y to 14.8 billion baht, driven by an 8.7% increase in sales volume amid improvement in consumption.
"Improved production efficiency arising from increased utilization partially offset higher costs from brand investment, marketing activities and raw materials," the company says.
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For the 9MFY2023, Ebitda of the non-alcoholic drinks business was up 3.3% y-o-y to 1.8 billion baht.
Last but not least, revenue from the food business increased by 19.2% to 14.3 billion baht, thanks to the resumption of dining in following the end of the pandemic, coupled with ongoing efforts to improve brand visibility and accessibility.
However, Thai Beverage incurred higher costs in its bid to grow this business segment, which caused Ebitda to drop by 8.4% y-o-y to 1.4 billion baht.
ThaiBev shares closed at 57 cents on Aug 7, unchanged for the day and down 16.2% year to date.
