HÀ NỘI — Vietnam Dairy Products Joint Stock Company (Vinamilk) aims to increase its total revenue by 8.5 per cent and its post-tax profit by 4.6 per cent in 2018.

The earnings figures for 2018 will be VNĐ55.5 trillion (US$2.46 billion) in revenue and VNĐ10.75 trillion in post-tax profit, the company’s management board announced at its annual general shareholder meeting on Saturday.

This is a modest target considering Vinamilk’s average annual growth of around 10 per cent in the previous five years.

The company also plans to raise its market share by 1 per cent each year, reaching at least 60 per cent in the next five years in Việt Nam. Its current market share is 58 per cent.

Based on such earnings targets, Vinamilk proposed a dividend payout that would be equal to 50 per cent of the company’s post-tax profit in 2018.

The first payment would be made in the third quarter of this year, worth VNĐ2,000 (8.9 US cents) per share and the second payment would be scheduled for May-June 2019.

The company’s board of managers also proposed a plan to issue bonus shares for current shareholders on a 20 per cent ratio in the third quarter of the year, meaning each shareholder would receive one additional share for every five shares he owns.

The total amount of bonus shares to be issued would be nearly 290.3 million shares, and the company’s charter capital would increase by VNĐ2.9 trillion.

Vinamilk is listing more than 1.45 billion shares on the HCM Stock Exchange and its shares had lost a total of 4.7 per cent in the last three sessions, closing Friday at VNĐ203,000 per share.

Regarding shareholders’ concerns over Vinamilk’s modest targeted earnings for 2018, chairwoman Mai Kiều Liên said that the average growth rate for the dairy sector is a maximum of 7 per cent per year and a minimum of 5 per cent per year.

If Vinamilk wants its market share to grow, its annual growth rate would have to be more than 7 per cent. But that will take a long time, she said, adding the company still has room for further development in the next five to 10 years.

Moreover, the company is uncertain whether its exports will reach the target as total exports in 2017 and the first quarter of this year showed signs of declining, Liên said.

Therefore, the targeted earnings for 2018 represents the minimum numbers that Vinamilk promises shareholders, she added.

Higher-than-expected organic sales

The organic segment has progressed better than the expectation of the company’s management board as Vinamilk has explored these products for a year and total production has not met the market demand.

Therefore, the company in the short term will expand its existing milk farms such as the one in Đà Lạt City of the central highlands province of Lâm Đồng and the one in the central province of Thanh Hóa, and seek to establish a new milk farm in the central region of Việt Nam.

At its annual shareholders’ meeting, Vinamilk proposed shareholders approve its plan to raise the number of management board members to 11 for the period 2017-20 from current nine.

Candidates for the additional position include Alain Xavier Cany, who is the Chief Representative and Chairman of the Jardine Matheson Limited (Việt Nam) and Nguyễn Chí Thành, deputy general director of the State Capital Investment Corporation (SCIC) – the Government’s unit controlling 36 per cent of the company’s charter capital. — VNS