Masan’s B2C segment is growing well since consumers are increasingly accepting MEATDeli meat products. — Photo courtesy of Masan

HCM CITY — Masan Group Corporation reported consolidated net revenues of VNĐ35.4 trillion (US$1.52 billion) for the first half of the year, a year-on-year increase of 103.3 per cent.

This was driven primarily by high double-digit growth at The CrownX, it said.

The core net profit after tax and post-minority interest (NPAT Post-MI) was VNĐ195 billion ($8.39 million) in the second quarter and VNĐ117 billion ($5.04 million) in the first half, down from the corresponding periods of last year.

That was mainly due to the consolidation of VCM Services and Trading Development JSC, parent of VinCommerce, operator of VinMart, VinMart+ and VinECO in the first half, which delivered a negative VNĐ1.058 trillion ($45.45 million) in earnings. 

However, Masan’s earnings benefited from MCH’s earnings growing by 24.1 per cent and a higher contribution from Techcombank.

Masan unveiled at its AGM that The CrownX, an integrated consumer-retail platform established to accelerate the modernisation of Việt Nam’s retail sector.

Phase 1 is focused on developing a scalable grocery platform that will be the foundation for a holistic online-to-offline point-of-life eco-system, allowing TCX to go beyond groceries and service consumers’ financial life, healthcare and entertainment.

TCX, which consolidates Masan’s interests in its FMCG and retail businesses, posted a topline of VNĐ12.592 trillion ($540.9 million) in the second quarter and VNĐ25.848 trillion ($1.1 billion) in the first half, up 20.5 per cent and 26.8 per cent.

TCX delivered EBITDA of VNĐ676 billion in Q2 and VNĐ1.26 trillion in the first half, increases of 80.7 per cent and 58.3 per cent.

Its EBITDA margin in the first half increased to 4.9 per cent from 3.9 per cent a year earlier.

The integration of Masan’s FMCG and retail businesses into a combined platform began in the first half and the management expects this process to further accelerate in the second half to improve both top- and bottom-line results.

In the second quarter Masan acquired an additional 12.6 per cent stake in TCX for $862 million, reflecting the management’s confidence in the value creation potential of TCX. 

Masan MEATLife (MML)’s meat business continued to scale up while enhancing operational efficiencies, and its revenues topped VNĐ1.055 trillion in the first half, with the momentum demonstrated by the 32.7 per cent growth in Q2 versus Q1.

MEATDeli, MML’s flagship meat brand, increased its revenue per outlet per day by 22 per cent to VNĐ3.6 million from VNĐ3 million in Q2.

The market share in Q2 was 2.1 per cent in HCM City and 3.6 per cent in Hà Nội.

The integrated meat business generated positive first half EBITDA of VNĐ34 billion, with VNĐ30 billion coming in Q2, demonstrating strong quarter to quarter momentum.

MML currently procures 40 per cent of its meat from qualified third parties at open market prices, adversely impacting profitability due to all-time high livestock prices.

It is working on strategic alternatives to develop a more sustainable supply chain model but also believes that live hog prices will normalise over the next six to 12 months since the pig population has increased by 30 per cent in April 2020 compared to December 2019.

Another subsidiary of the group, Techcombank, continues to post stellar results despite having to navigate the COVID-19 pandemic, with profit before tax growing by 19 per cent year-on-year to VNĐ6.738 trillion in the first half.

As highlighted at Masan’s AGM, the management believes that there are significant synergies that enable maintaining of TCB’s growth over the medium term by integrating the bank’s services and products with TCX’s retail platform.  

Masan High-Tech Materials (MHT), formerly named Masan Resources (HNX-UPCoM ticker remains MSR), was adversely impacted by the shutdown of the global economy due to COVID-19.

Its net revenue was flat in Q2 compared to the period a year ago, helped by one month of sales contribution (VNĐ486 billion) from the acquisition and consolidation of H.C. Starck’s global tungsten business.

This acquisition delivers on MHT’s vision to move beyond being an upstream tungsten producer into a global high-tech materials platform.

The management’s focus in the second half of the year will be to integrate the businesses and develop a supply chain and sales model to generate consistent cash flows throughout tungsten price cycles.

It expects the results to be reflected in Q4 this year and Q1 2021 at the latest.

Dr Nguyễn Đăng Quang, Masan’s chairman, said: “We have transformed many FMCG categories but our share of the consumer wallet is only 1 per cent. CrownX is our strategic bet to transform the entire grocery space both in terms of products and services.

“We aim to serve at least 50 million consumers for their daily grocery needs, increasing our share of the consumer wallet to 25 per cent. Grocery is the foundation to win consumer loyalty but not the endgame.”   

MSN’s profitability is expected to improve further in the second half driven by TCX’s continued growth in its consumer product portfolio and the turn-around game plan for its store network starting to yield results due to improving costs, better assortment and network optimisation, greater operational efficiencies in MML and MHT and continued positive bottom line contribution from TCB. — VNS