Masan Group Corporation on October 23 released its unaudited management accounts for the third quarter with earnings up 1,350 per cent on-year.
In the third quarter, Masan Group’s net revenue reached VND21.5 trillion ($845.3 million), a 6.6 per cent increase from $794.2 million in 3Q2023, supported by sustained topline momentum from consumer-retail businesses.
Masan MEATLife's counter at WinMart supermarket.
Net profit after tax post minority interest of $27.6 million was up 1,349.2 per cent on-year, driven by strong profitability momentum across the consumer-retail businesses and $30.9 million lower in debt-incurring net financial expenses and absence of non-cash deduction as result of FX volatility.
Earnings before interest, taxes, depreciation, and amortisation (EBITDA) reached $166.3 million in 3Q2024, increasing by 13.2 per cent on-year. This significant uplift was driven by positive earnings growth momentum of all consumer-retail businesses.
Masan has hedged 100 per cent of its long-term USD-loan since the beginning of the year, securing the P&L against negative impacts of FX movements with a year-over-year uplift of $20 million on net profit after tax post minority interest.
Consumer-retail businesses maintained growth momentum, further supported by non-core activities’ profit uplift.
Masan Consumer Corporation delivered 10.4 per cent on-year revenue growth in 3Q2024 to $313.7 million, driven by premiumisation in Convenience Foods (+11 per cent on-year) and Seasonings (+6.7 per cent on-year), and innovations in Beverages (+18.8 per cent on-year), and Home and Personal care (+12.4 per cent on-year).
It also strategically reduced trade promotion to invest in higher Return on Investment activities such as new channel development and brand building, optimising operating expense over revenue by 70bps. As the result, net profit after tax post minority interest recorded 25.9 per cent, a 90bps increase compared to the same period last year.
WinCommerce reported 9.1 per cent on-year revenue growth in 3Q2024 to reach revenue of $338.12 million across the whole network, mainly driven by new store formats catering to urban shoppers and Winmart+ Rural catering to rural shoppers, with 12.5 per cent and 11.5 per cent like-for-like on-year growth, respectively, compared to 8 per cent on-year growth of the traditional format.
As of September 2024, WinCommerce operated 3,733 WCM stores, a net opening of 60 stores since 2Q2024. New store opening has re-accelerated as like-for-like growth continued to improve and new store formats with distinct value proposition allowed more flexibility in site selection.
Winmart supermarkets have delivered positive EBIT despite flat top-line growth, mainly driven by improvement in shrinkage.
Masan MEATLife delivered $1.69 million on-year uplift in EBIT and $4.13 million on-year uplift for net profit after tax post minority interest for 3Q2024, driven by increased sales mix from processed meat and higher chicken and pork market prices.
In 3Q2024 meat revenue, including revenue from fresh pork, meat chicken, and processed meat, increased by 13.6 per cent on-year while farm revenue decreased by 28.2 per cent on-year in 3Q2024 as the company strategically moved further downstream and rationalise chicken farms. Consequently, Masan MEATLife’s revenue increased slightly by 1.7 per cent on-year to $76.3 million in 3Q2024.
Masan MEATLife continues its mission to revolutionise the under-developed Vietnamese processed meat market with tasty, healthy and high-quality products, with the two brands Ponnie and Heo Cao Boi having captured 50 per cent of the respective market share in the sterilised sausage market.
Innovations of the processed meat segment, which contributed 5.11 million in 3Q2024, was the primary driver of the 19.4 per cent year-over-year growth in processed meat, highlighting the strategic focus on product proliferation to expand consumption occasions.
Phuc Long Heritage's net revenue grew by 12.8 per cent on-year to $16.7 million in 3Q2024, mainly driven by contribution from 21 new stores opened in the same quarter. The company currently operates 174 stores nationwide. Like-for-like daily sales of PLH stores outside WCM maintained consistent growth in 3Q2024 compared to the second quarter of 2024 at 2 per cent on-quarter.
Masan High-Tech Materials' EBIT decreased by $4.6 million due to lower market demand, coupled with disruption caused by Typhoon Yagi and scheduled maintenance of a processing plant.
The sale of H.C. Starck to Mitsubishi Materials Corporation for an equity purchase price of $134.5 million is expected to close before year-end 2024, upon which Masan is expected to benefit from a long-term net profit after tax uplift of $20-30 million. Transaction proceeds will be used to reduce Masan’s outstanding debt balance, whilst the deconsolidation of H.C. Starck also means Masan is relieved from pension liabilities of approximately $196 million.
Techcombank, Masan’s associated company, contributed $44.8 million in EBITDA in 3Q2024, representing 8.7 per cent on-year growth.
“The most significant shareholder value creation driver is WinCommerce and Masan MEATLife achieving positive in 3Q2024, which will accelerate as we continue to execute our medium-term strategy. Masan Consumer continues to deliver double-digit top and bottom-line growth and is entering the next phase of growth as premiumisation, innovations and out-of-home consumption pick up," said Nguyen Dang Quang, chairman of Masan Group.
"With this momentum, I am confident we will approach our high-case net profit after tax target of $78.6 million, and now are focused on synergising our entire consumer-retail platform to deliver consolidated double-digit top and bottom-line growth for 2025.”
Source: Vietnam Investment Review