ThaiBev sobers up as non-alcoholic drinks take the spotlight

Large-scale restructuring is on the cards.

A massive restructuring drive is on the cards for ThaiBev as the giant seeks to move away from its overt dependence on alcoholic drinks.

DBS analysts note that one of ThaiBev’s growth targets is to increase the revenue share of non-alcoholic beverages (NAB) to over 50%, from little over 10% at present.

One way to do this is by consolidating its stake in Fraser and Neave (FNN) and turning it into subsidiary.

“With the impending disposal of FNN’s stake in MBL to its JV partner, Myanmar Economic Holdings Limited, to be completed by 20 August, this could possibly pave the way for the eventual consolidation of FNN as a subsidiary, coupled with the eventual monetisation of its stake in Frasers Centrepoint Limited,” DBS said.

However, it will take a while before ThaiBev successfully manages to shrug off its deeply-rooted alcohol dependence.

“With the launch of 100Plus in Thailand through a collaboration with FNN, it could take time for the brand to be built up. We project NAB's business segment to remain in the red over the medium term as management builds traction,” DBS said.

ThaiBev’s Q2 net profit grew 6.2% to $234.9m (THB 5.9b). It booked wider losses in the non-alcoholic segment due to increased investments, but its resilient beer and spirits business more than managed to pick up the slack.

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