Masan Group, one of Vietnam’s largest consumer goods producers, has made public its business report for the first half of 2016, with net profit nearly tripling year on year.
According to the latest report, Masan’s total revenue during this period reached over VND19.1 trillion (nearly $860 million), a year-on-year increase of 83.8 percent, which has helped the firm accomplish nearly half of the year’s expected revenue.
The significant increase of its first-half earnings resulted from the growth of all business segments, which are branded food and non-alcoholic beverages, consumer animal protein products and mining, Masan’s report said.
Revenue from food and beverages in the second quarter of this year reached VND3.566 trillion ($160 million), up 14.7 percent year on year, and increased by 28.3 percent compared to the first quarter.
This increase was supported by new product launches. Masan Consumer expects to launch its first seasoning brand in Thailand in the third quarter with the establishment of Masan Consumer (Thailand) Co., Ltd, Masan's first foreign subsidiary.
The subsidiary is expected to help Masan expand its business in the Inland ASEAN market and deepen its relationship with Thai beer company Singha Asia Holding Pte Ltd, which announced it had acquired a 25 percent stake in Masan Consumer Holdings and a 33.3 percent stake in Masan Brewery for $1.1 billion last December.
Notably, the consumer animal protein segment was a major boost for the firm’s performance during this period as this segment contributed nearly 60 percent of group’s total revenue.
In the first half of 2016, revenue from animal protein products grew by 231.7 percent to VND11.051 trillion ($493 million) from VND3.332 trillion ($149 million) a year earlier. Masan Nutri-Science (MNS), the unit operating in animal protein business, increased sales value by 18.4 percent on-year in the second quarter.
Masan Nutri-Science’s net profit in the second quarter rose by 103.8 percent from the same period last year. The growth of the animal protein business was also backed by a strategic partnership with leading local meat producer Vissan and the establishment of Masan Nutri-Farm.
Masan was also able to earn profit from the Vietnam Technological and Commercial Joint Stock Bank (Techcombank), where the consumer producer owns 19.5 percent of the bank’s capital.
Techcombank achieved a year-on-year pre-tax growth rate of nearly 54 per cent to roughly VND1.6 trillion in the first half of 2016 as the bank was able to reduce its total cost and manage its lending since the bank has been restructured in the last four years.
On the contrary, the mining industry weighed on Masan’s first-half profit as the mining company Masan Resource recorded lower profits than last year.
Masan Resource saw a 45 percent-increase in its revenue during the first six months, however, its net profit fell nearly 33 percent over a year to VND70 billion (nearly $3.5 million).
Masan said that its first-half mining profit dropped as global wolfram price remained low. Masan expected that the commodity prices will rebound in the second half and the company will be able to reduce its production cost.
Based on the positive results from the first half of the year, Masan has raised its expected net profit for this year by a quarter to VND2.4 trillion ($107 million) from the current VND1.9 trillion ($85.2 million).
Masan Group was founded in 1996 and is based in Ho Chi Minh City. Its key subsidiaries include Masan Consumer Holdings, Masan Nutri-Science and Masan Resources. Techcombank is its associate company. The group was listed on the Ho Chi Minh Stock Exchange in November 2009.