Thanks to higher sales volume.
Profits of the spirits segment of Thai Beverage Public Company Limited (ThaiBev) rose 38% YoY to $206.06m (THB5b) in Q4.
DBS Equity Research said revenue was up by 35% YoY to $1.18b (THB28.6b), on the back of 28.7% YoY increase in volume to 154 million litres, along with an estimated 4.8% implied average selling price (ASP) increase.
With the excise increase in September, distributors had stocked up inventory about four weeks prior to the increase.
ThaiBev said that distributors are carrying an additional two weeks of inventory, and, assuming no change in consumer sentiment, it is estimated that the excess inventory should be absorbed within Q1 of 2018 or the last calendar quarter of 2017.
Meanwhile, the entry of Tawandang 1999 into the white spirits market has had very limited impact, DBS said. Distribution is still limited. Nonetheless, ThaiBev is monitoring the situation closely.
Meanwhile, ThaiBev's beer segment posted a 6.8% drop in sales volume to 8.45 million hectolitres and a 4% drop in net profit to $128.93m (THB3.13b). DBS said this was caused by higher advertising and promotion spending.
The non-alcoholic beverages (NAB) segment's losses narrowed down to $35.22m (THB855m) compared to $64.67m (THB1.57b) last year.
The improvement was helped by a better gross profit due to lower packaging costs, coupled with lower A&P expenses.
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