A production line of Hà Nội Beer Alcohol and Beverage Joint Stock Corporation (Habeco). — Photo Habeco

HÀ NỘI — Hà Nội Beer Alcohol and Beverage Joint Stock Corporation (Habeco) experienced a significant setback in the first quarter of 2024 after a series of profitable quarters. The company reported its largest quarterly loss in four years, since the first quarter of 2020.

Although net revenue for the quarter reached VNĐ1.3 trillion (US$51 million), showing a 12 per cent increase compared to the same period last year, Habeco faced challenges in maintaining profitability. The gross profit, excluding cost price, rose by nearly 9 per cent to VNĐ267 billion. However, after factoring in expenses and taxes, the company incurred an after-tax loss of nearly VNĐ21 billion, a substantial increase from the VNĐ3.7 billion loss in the same period last year.

Habeco's leaders attributed the negative profits to a decrease in financial revenue caused by lower deposit interest rates, resulting in a 16 per cent decline to nearly VNĐ38 billion. Additionally, increased investment in marketing efforts significantly impacted costs.

The financial report revealed that sales expenses rose by 13 per cent to over VNĐ230 billion. The most significant increase was seen in advertising, promotion, and support costs, which rose by 42 per cent to VNĐ105 billion. This trend reflects the beer industry's reliance on advertising to enhance brand recognition and gain market share, especially considering stricter regulations on alcohol concentration.

Habeco, which traces its origins back to the Hommel brewery established by the French in 1890, has faced intensified competition in recent years from strong rivals like Heineken and Carlsberg. Despite being a prominent player in the northern beer market with iconic brands such as Hà Nội Beer, Hà Nội Bia Hơi and Trúc Bạch Beer, Habeco's market share has gradually diminished, accompanied by declining business results.

The company attributes its challenges to a sluggish recovery in consumer purchasing power, stringent regulations on alcohol concentration, and ongoing intense competition, exacerbated by the impact of the pandemic on consumer demand.

Habeco has set a revenue target of approximately VNĐ6.5 trillion and an after-tax profit goal of VNĐ202 billion for this year, both lower than the levels achieved in 2023. However, the first-quarter results indicate that the company has a long way to go to reach these targets.

In the market, BHN shares have been hovering near historic low of VNĐ38,000 per share, with a market capitalisation of only VNĐ8.8 trillion, nearing its all-time lowest point. — VNS