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|Sabeco may face the drop in revenue this year because of Decree 100|
Sabeco (HSX: SAB) has just published its business report for the fourth quarter of 2019. Accordingly, its revenue fell by 7 per cent while after-tax profit rose by 17 per cent. According to Viet Capital Securities, its sales performance was impacted by the rumours around SAB’s owner.
Last October, false information reached the public about SAB being under the ownership of a Chinese company. However, the news was quickly stamped out as Deputy Minister of Industry and Trade Do Thang Hai affirmed that ThaiBev subsidiary Vietnam Beverage seized 53.59 per cent of SAB’s shares at a National Assembly meeting in the same month.
Otherwise, the after-tax profit improved because of a hike in the price of Saigon Lager products in last August and Saigon Special products in October. Also, the decline in costs for materials and cost-optimisation measures for transportation have contributed significantly to the performance.
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For the full year of 2019, Sabeco recorded a 5 per cent growth in revenue and a 21 per cent increase in after-tax profit. For the next year, Sabeco's business is forecast to not maintain the double-digit output growth due to Decree No.100/2019/ND-CP outlining sanctions for drink-driving, according to the latest report of SSI Research. Specifically, under the impact of the new regulation, growth may be 6-7 per cent in 2020.
The decree's effects on Vietnamese beer producers have been outlined in detail by VIR in a previous article.
According to Decree No.100/2019/ND-CP, drunk car drivers shall be fined between VND6-40 million ($260-1,750) instead of the previous fine of about VND19 million ($825) if tests show that alcohol content exceeds 80mg per 100ml of blood or 0.4mg per litre of breath. Additionally, their licences shall be revoked for 22-24 months compared to just 4-6 months previously.
Meanwhile, drunk motorcyclists shall be imposed fines of VND2-8 million ($87-348) and their licences shall be suspended for 22-24 months if tests confirm alcohol content in blood or breath. Drunk cyclists shall be fined up to VND600,000 ($26).