- Green Growth
- Your Consultant
|Masan has reported rosy performance in the 2018 financial year|
Masan Group Corporation (HSX: MSN, Masan), has just reported its management accounts for the financial year 2018. Of this, delivered record for the 2018 financial year Post-MI was VND4.916 trillion ($213.74 million), while core after-tax net profit was VND3.478 trillion ($151.2 million), posting a growth of 57.1 per cent, with core net margin expanding 322 bps to 9.1 per cent.
In 2018, MSN successfully launched its branded fresh meat platform “MEATDeli,” set up pillars to increasingly shift Masan Nutri-Science to an FMCG-led business, driving long-term revenue and profitability growth across pig price cycles.
With strong growth momentum across all operating businesses, MSN expects net revenue growth of 18-30 per cent and core NPAT Post-MI of 44-58 per cent in the 2019 financial year.
“We delivered on the first year of our five-year growth plan and this is just the start. Our strategic bets are yielding strong results. Masan Consumer will continue to premiumise its portfolio via value-added innovations to deliver more than 20 per cent long-term growth. With the launch of MEATDeli, Masan Nutri-Science will become a branded FMCG business by converting the $10.2 billion pork meat market via setting the new standard for safe fresh and processed meat products. This will eliminate growth cyclicality and deliver FMCG profit margins. Masan Resources will continue its transformation from a miner to global processor by acquiring technology to go downstream. Techcombank’s growth will be centred on serving the financial life of 100 million consumers and geared toward services to drive fee income. Our ultimate five year objective is to own the largest share of the consumer wallet by accelerating these strategic pillars in the upcoming years,” said chairman and CEO Nguyen Dang Quang.
Specifically, due to the "advanced" strategy in the food industry, Masan Consumer (MCH), the key subsidiary of MSN, has achieved new record in 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 last year, 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 last 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 on-year due to Wakeup 247, increasing brand power, and expanding points of sales from 75k last year to 160k 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.
Additionally, beer underperformed against management expectations, net revenue in fourth 2018 dropped by 33.2 per cent on-year and full year net revenue delivered 23.3 per cent growth. In the fourth quarter of 2018, MCH has built a dedicated sales force to penetrate on-premise which is key to scale-up the business in 2019.
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. The innovation pipeline to cater to Vietnamese taste and preferences for 2019 will be key to drive growth.
The journey of MNS to become a branded meat company began with the launch of “MEATDeli” and the feed segment starts to show signals of recovery in the fourth quarter of 2018. Meat Deli fulfils consumers’ big unmet need for safe and healthy meat. The Ha Nam meat complex adheres to BRC standards – the world's leading standard of food safety.
MEATDeli products are currently sold via self-operated MEATDeli retail stores and via Vinmart supermarket chains in Hanoi. The management expects to ramp-up the distribution network to increase availability with an aim to achieve a 5-10 per cent market share in Hanoi by year-end.
|Masan's new MEATDeli is expected to provide additional growth momentum in the year ahead|
Another subsidiary of MSN, Masan Resource (MSR) maintained a very 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. MSR has just acquired 49 per cent of H.C.Starck, and renamed it to Masan Tungsten Limited Liability Company (MTC), contributing to the outstanding performance. MTC plans to increase capacity to 12,000 mtu making it one of the world’s largest mid-stream tungsten producer.
Additionally, Techcombank has also been mentioned in the financial statement of MSN. 2018 is the first year that Techcombank jumped to the second position with the profit of VND10.66 trillion ($463.5 million), behind Vietcombank only.
In the new financial year, Masan expects to get net revenue of VND45.2-50 trillion ($1.26-2.18 billion), a growth of 18-31 per cent. MNS’ 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 MNS’ consolidated net revenue. Key potential risks include pig disease outbreak impacting feed sales growth and scaling-up the meat business distribution network. MSR net revenue is expected to grow by 12-22 per cent driven by higher sales volume. Key impacts will be the continued low tungsten price environment and potential lower price realisation for copper products.
Management expects consolidated 2019 financial year NPAT Post-MI of VND5-5.5 trillion ($217.4-239.1 million), growth of 44-58 per cent, resulting in a NPAT Post-MI margin of above 10 per cent.