Masan Group Corporation’s net revenues in the first three quarters of 2023 reached VNĐ57.47 trillion. - Photo courtesy of Masan

HCM CITY - Masan Group Corporation had net revenues of VNĐ57.47 trillion (US$2.34 billion) in the first nine months of the year, a 3.5 per cent rise year-in-year, according to its recent unaudited financial reports.

The net profit after tax before minority interest (NPAT pre-MI) was VNĐ1.35 trillion, and its consolidated cash balance, including cash and cash equivalents, was around VNĐ14.26 trillion.

Masan’s consumer businesses - WinCommerce, Masan Consumer Holdings, Masan MEATLife, and Phúc Long Heritage - grew its earnings before interest and taxes (EBIT) by 45.5 per cent.

In the third quarter its EBIT grew by 47.3 per cent.

The CrownX, its integrated consumer-retail platform that consolidates WinCommerce and Masan Consumer Holdings, achieved revenues of VNĐ41.7 trillion, up 2.4 per cent year-on-year (VNĐ14.87 trillion in Q3, up 1.2 per cent).

Its earnings before interest, taxes, depreciation and amortisation (EDITDA) reached around VNĐ5,6 trillion, up 11.4 per cent (VNĐ2.1 trillion in Q3, up 13.6 per cent).

WinCommerce reached EBIT breakeven for the first time post COVID-19, with net revenues increasing by 2.1% (Q3 saw a rise of 3.3 per cent), thanks to opening 245 minimarts and two supermarkets around Việt Nam.

WCM has been renovating existing WinMart+ stores in urban and rural areas, transforming them into the new WIN “All That You Need” format in urban areas and WinMart+ Rural in rural areas.

According to Masan, these renovations are a major driver of like-for-like (LFL) improvement, and are well on track.

Renovated stores are delivering revenue uplifts as envisioned – LFL growth of these WIN and WinMart+ Rural stores in the third quarter reached 4.8 per cent and -3.5 per cent year-on-year, in contrast to an 8 per cent decline for other existing WinMart+ stores.

Meanwhile, Masan Consumer Holdings achieved net revenues of around VNĐ20.38 trillion in the first nine months, a 10.5 per cent rise year-on-year and a gross margin of 44.3 per cent.

Seasonings, convenience foods, and home and personal care saw outstanding business results, with sales growing at 21 per cent, 8.3 per cent and 39.4 per cent.

The company’s gross margin in the third quarter reached an all-time high of 45.6 per cent, resulting in nearly 26 per cent EBITDA margin for the quarter.

This exceptional gross margin is attributable to several factors, including the sustaining of higher prices thanks to brand power, higher margin product mix, the ability to secure raw materials at low cost, and optimised demand and supply planning to improve manufacturing conversion cost.

Masan MeatLife’s revenues grew rapidly thanks to stronger sales across almost all product groups. - Photo courtesy of Masan

Masan MeatLife’s revenues in first three quarters increased by 61.1 per cent, and by 47.5 per cent in Q3 alone.

This growth was driven by stronger sales across almost all segments, notably processed meats, which saw a remarkable growth of 35.9 per cent in the first three quarters (23.1 per cent in Q3).

According to Masan, Masan MeatLife’s gross margin in the third quarter was up 18.6 per cent, higher than in the first nine months, due to significant quarter-on-quarter improvement in gross margins of farm pigs and farm chickens, which itself was caused by higher hog on the hoof and chicken broiler prices in Q3.

In the case of processed meats, the rise in revenues was primarily driven by increased volumes.

MML has reduced branded chilled pork’s price gap with wet markets via exclusive prices for WIN members, resulting in a sustained 30 per cent rise in daily revenues for MML products at WinCommerce outlets.

Phúc Long Heritage improved its EBITDA margin to 20.8 per cent in Q3 from 17 per cent in Q2 by reallocating its Phúc Long kiosks inside WinMart and WinMart+ stores. It also opened them at six new locations in Q3.

PLH stores outside WCM experienced marginal growth in revenues to reach VNĐ876 billion in first nine months.

Bain Capital, a global private investment firm, will invest up to $500 million in its equity into Masan Group, which will strengthen the company’s financial position and deleverage its balance sheet.

Masan has fully repaid its debt obligations maturing in 2023. Bond obligations maturing in 2024 will be nearly VNĐ6 trillion, which is significantly lower than the company’s current cash and equivalents of VNĐ14 trillion and 12-month trailing EBITDA of nearly VNĐ14 trillion.

Pro forma cash and cash equivalents are expected to increase by approximately VNĐ4,9 trillion to VNĐ12,25 trillion after the Bain Capital-led equity investment.

Free cash flows improved consistently over several quarters, rising to VNĐ2,2 trillion in Q3 from VNĐ125 billion in the same period last year, due to more effective working capital management.

Plans for Q4

In the last quarter of the year Masan will focus on several initiatives to continue its sustainable growth.

WinCommerce plans to boost sales, improving LFL growth to achieve store revenue levels similar to that of last year’s final quarter and target positive EBIT in this year’s Q4.

Masan Consumer Holdings will continue to focus on innovating its beverages and home and personal care and convenience food products to drive Q4 growth and remain a significant growth driver in 2024.

Phúc Long Heritage aims to open 11 new stores and improve sales per store.

Masan MEATLife expects to improve daily sales at WinCommerce from VNĐ1.6 million per store to VNĐ2 million by focusing on a dynamic pricing strategy to enhance sales of slow-moving items and setting up distribution plans to deliver the right assortment to the right store.

It will also roll out Meat Corners stalls in select locations, enhancing visibility and experience for MEATDeli products, and scrupulously control costs to adapt to the new market environment.

Masan will continue to actively explore alternatives in the capital market to extend its debt maturities and improve interest rates and earnings by deleveraging.

It will also continue to invest in initiatives that build on the strengths of its comprehensive retail consumer ecosystem such as membership programmes and logistics systems. - VNS