Thai Beverage Public Company Limited

Good evening everyone and thank you for joining the Cybeverage First Half 2023 results call. All participants have been placed in a listen-only mode. Later, we will conduct a question and answer session and instructions will be given at that time. I will now hand over the call to the presenters, Ms. Namphoon Ongsothornungsi, Thai BEV's Head of Investor Relations, and the members of Thai BEV's Senior Management Team. Please go ahead. Thank you. Thank you.

Good evening, ladies and gentlemen. Welcome to Thai BEV, the first half of 2023, and at the 31st of March, 2023, Financial Resource Conference Call. I am Namphoon Ongsothornungsi, Head of Investor Relations. For the conference call tonight, I will start with the summary of the first half results, then we will open the line for Q&A session with our management team. The summary of the first half financial results, total sales revenue of the company for the six months ended the 31st of March 2023 was 148,295 million baht, an increase of 3.7% when compared to the same period last year. This was due to an increase in sales revenue of the beer business, non-alcoholic beverages business, food business, although there was a slight decrease in sales revenue of the spirits business. Net profit was 17,781 million baht, a decrease of 3.2% compared to the same period last year. This was due to a decrease in net profit of the beer business, non-alcoholic beverage business, and food business, partly offset by an increase in net profit of associated companies and the spirits business. Thai BEPS Board of Directors agreed to propose an interim dividend payment of 3,769 million baht or 0.5 baht per share, the same as last year. For the highlights of the first half operations, the SPRIT business recorded sales revenue of 65,161 million baht in the first half 2023, a slight decrease of 0.04% year-on-year. This was due to an 8.5% decline in total sales volume from a high base in the first half of last year. That was a result of sales agents accumulating inventory ahead of price increase during the period. Despite price adjustments and changes in the product portfolio mix, driven by increased consumption of brass spritz in Thailand, the spritz business continues to face cost pressure, particularly in relation to packaging costs. Nevertheless, the business reported a net profit of 12,839 million baht, showing a 0.18% increase compared to the first half of 2022. The beer business saw a 4% increase in sales revenue of $64,434 million in the first half of 2023. Despite a 2.2% decrease in total sales volume year-on-year, the growth in sales revenue was due to price increases implemented. However, an increase in brand investment and marketing activities during the first six seasons coupled with an increase in key raw material and packaging costs resulted in a net profit decline of 29.5% to 2,532 million baht. The group's NAB business recorded 15.1% rise in sales revenue to 9,439 million baht in the first half of 2023, lifted by 7.7% increase in overall sales volume. This was mainly driven by higher demand for drinking water, ready-to-drink tea, and carbonated soft drink products, as consumption improved post-pandemic and economic activities returned to normal. However, net profit declined by 35.2% year-on-year to 284 million baht, taking into account increased brand investment and marketing activities, higher distribution costs, and material costs. The decline was partially offset by production efficiency resulting from increased utilization due to the volume growth. The food business recorded a 21.8% year-on-year increase in sales revenue to reach 9,365 million baht in the first half of 2023, in line with the rise in dine-in traffic at the restaurant. However, the group's ongoing efforts to improve brand visibility and accessibility, along with pre-operating costs incurred in conjunction with the opening of the new stores, cost push factors, as well as increased operational and administrative costs to support the sales growth of the food operations, these have led to 51.2% decrease in the net profit to 82 million baht. The international business recorded a year-on-year increase of 6.5% in sales revenue to 39,262 million baht in the first half. The increase was attributed to 19.8% surge in international spirit sales, driven by strong sales performance in Myanmar, increased bulk sales in India, the UK, and Japan, and higher cash sales in ASEAN and some North Asian countries. The international business also recorded 3.9% growth in the beer sales, mainly driven by sales revenue in Vietnam and higher sales in China. That is the summary of our first half 2023 financial results. Now we will open the line to any questions. Diana, please help open the line for Q&A.

Will do. Thank you. We will now begin the question and answer session. Participants with questions to pose, please press star 11 on your telephone keypad and you will be placed in the queue. To cancel the queue, please press star 11 again. Our first question is from Divya Gangahar Morgan Stanley. Please go ahead.