Illustrative image (Photo: Masan) The net profit after tax before minority interest (NPAT pre-MI) was 1.35 trillion VND, and its consolidated cash balance, including cash and cash equivalents, was around 14.26 trillion VND.
Masan’s consumer businesses - WinCommerce, Masan Consumer Holdings, Masan MEATLife, and Phuc Long Heritage - grew its earnings before interest and taxes (EBIT) by 45.5%. In the third quarter its EBIT grew by 47.3%.
The CrownX, its integrated consumer-retail platform that consolidates WinCommerce and Masan Consumer Holdings, achieved revenues of 41.7 trillion VND, up 2.4% year-on-year (14.87 trillion VND in Q3, up 1.2%).
Its earnings before interest, taxes, depreciation and amortisation (EDITDA) reached around 5.6 trillion VND, up 11.4% (2.1 trillion VND in Q3, up 13.6%).
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%), thanks to opening 245 minimarts and two supermarkets around Vietnam.
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% and -3.5% year-on-year, in contrast to an 8% decline for other existing WinMart stores.
Meanwhile, Masan Consumer Holdings achieved net revenues of around 20.38 trillion VND in the first nine months, a 10.5% rise year-on-year and a gross margin of 44.3%.
Seasonings, convenience foods, and home and personal care saw outstanding business results, with sales growing at 21%, 8.3% and 39.4%.
The company’s gross margin in the third quarter reached an all-time high of 45.6%, resulting in nearly 26% 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 in first three quarters increased by 61.1%, and by 47.5% 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% in the first three quarters (23.1% in Q3).
According to Masan, Masan MeatLife’s gross margin in the third quarter was up 18.6%, 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% rise in daily revenues for MML products at WinCommerce outlets.
Phuc Long Heritage improved its EBITDA margin to 20.8% in Q3 from 17% in Q2 by reallocating its Phuc 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 876 billion VND in the first nine months.
Bain Capital, a global private investment firm, will invest up to 500 million USD 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 6 trillion VND, which is significantly lower than the company’s current cash and equivalents of 14 trillion VND and 12-month trailing EBITDA of nearly 14 trillion VND.
Pro forma cash and cash equivalents are expected to increase by approximately 4.9 trillion VND to 12.25 trillion VND after the Bain Capital-led equity investment.
Free cash flows improved consistently over several quarters, rising to 2.2 trillion VND in Q3 from 125 billion VND 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.
Phuc Long Heritage aims to open 11 new stores and improve sales per store.
Masan MEATLife expects to improve daily sales at WinCommerce from 1.6 million VND per store to 2 million VND 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./.
VNA
