Vinamilk has recently announced its 3Q2020 business results with double-digit profit growth. Specifically, the total revenue in the third quarter of this company is expected to increase by 9% to 15,561 billion VND, and the profit after tax to increase by 16% to 3,106 billion VND.
For the first 9 months, the company’s estimated revenue and profit both increased by more than 7% compared to the same period last year, reaching 45,277 billion VND and 8,967 billion VND, respectively. The company has achieved nearly 84% of the planned profit for 2020 (10,690 billion VND).
After being acquired by Vinamilk, Moc Chau Milk has also made a remarkable improvement. The company’s net revenue in 3Q2020 increased by 14% to 775 billion VND. Its gross profit margin reached 34.6%, which is a sharp improvement compared to the previous years.
The profit after tax of this company in the third quarter more than doubled that in the same period last year, reaching more than 102 billion VND. The company explains that this result comes from effective cost management, and policies to support distributors and customers with reasonable prices, leading to an increase in the number of consumers using Moc Chau Milk products.
For the first 9 months, the company's revenue increased by nearly 10% to 2,142 billion VND. Its profit after tax increased by 69% to nearly 209 billion VND and exceeded 33% of the year plan. Moc Chau Milk has aggressively spent nearly 370 billion VND (double compared to the first 9 months of 2019) on support and advertising programs.
Having made huge losses in the 2016-2018 period, International Dairy Company (IDP) suddenly experienced the opposite when it has continuously enjoyed profits since 2019. The 3Q2020 report showed that its gross profit margin was 41.7%, similar to that of Vinamilk even though it does not have the advantage of scale like this market leader.
The company’s Q3's EAT is 4.2 times higher than the same period last year, reaching nearly 159 billion VND. For the first 9 months, IDP recorded revenue of 2,828 billion VND, while its profit increased by 3.3 times to reach more than 309 billion VND. However, the accumulated loss of this company still recorded nearly 270 billion VND.
IDP's business results became better after there was a change in ownership. In 2014, IDP was invested by VinaCapital and Daiwa Group. In 2019, these old investors gave up the "game" to new owners when Blue Point Company increased its ownership to 80% of charter capital and Ban Viet Securities Company bought 15% of shares.
Not all companies in the dairy industry reported positive results. Quang Ngai Sugar JSC has just announced lower-than-expected 3Q2020’s business results as both revenue and profit declined. Particularly, the revenue from soymilk decreased by 10.7% year-on-year. The sales volume and average selling price of soymilk products of Quang Ngai Sugar both decreased.
For the first 9 months of 2020, Quang Ngai Sugar achieved 5,116 billion VND of net revenue, a decrease of 15.4% over the same period last year; and 676 billion VND of profit after tax, a decrease of 16.2%.
According to the Dairy Industry Report by SSI Research, domestic demand for dairy products has been less affected by the Covid-19 epidemic. Milk is even one of the top products with increased purchase volume through e-commerce platforms during the pandemic.
Although domestic brands have dominated the market, competition from foreign players still exists as the EVFTA will eliminate 5-20% tariffs on European dairy products within the next 3-5 years.
Exports, especially to the Chinese market, will become more important to boost growth. All domestic dairy manufacturers have officially exported their products to China, which benefits market leaders such as Vinamilk, TH True Milk, Vinasoy, and Moc Chau Milk.