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Tag: profit

  • Habeco Vietnam reports another year of falling profits

    Habeco Vietnam reports another year of falling profits

    Habeco’s profits fell by 23 percent last year to VND667 billion ($28.71 million), the fourth straight year of decline. Hanoi Beer Alcohol and Beverage Corp, as it is formally known, one of Vietnam’s biggest brewers, also reported a 5 percent fall in revenues to VND9.4 trillion ($404.67 million). There was a sharp increase in operating expenses, especially cost of sales.

    After falling for four years profits are now less than half of the 2014 figure of VND1.44 trillion ($62.12 million).

    Habeco’s decline is contrary to the general growth trend as Vietnam remains one of Asia’s biggest beer consumers. According to Euromonitor statistics, while global beer consumption volume remains unchanged last year, the figure for Vietnam soared.

    According to data from the Vietnamese Beer, Alcohol and Beverages Association, on average a Vietnamese person drank nearly 45 liters of beer in 2017, an almost 50 percent jump in two years.

    Many securities firms believe that though Habeco still leads the beer market in the north, it faces challenges like changing consumer tastes and competitive pressure from foreign brands. It has only been able to maintain market share in the low-priced segment, ceding ground in the premium segment to brands such as Heineken, Saigon Beer (now a subsidiary of ThaiBev) and other foreign brands.

    Ban Viet Securities Company’s latest data shows Habeco’s share in the beer market has fallen continuously in the last six years, from nearly 20 percent in 2010 to 18 percent by the end of 2017.

    The reason for this is that the low-cost segment, its strength, is shrinking, said the securities company. The cheap beer segment now makes up of only 8 percent of the market compared to 14 percent seven years ago.

    Vietnam is famous for its beer drinking culture, and it is widely believed that business deals go more smoothly over a few drinks.

    The country is the biggest beer market in Southeast Asia, consuming nearly four billion liters in 2017. It spends on average $3.4 billion on alcohol each year, or $300 per capita, while spending on health averages $113 per person, according to the Ministry of Health.

  • V-Mart reports 27 percent growth in topline, reaches 200-store milestone

    V-Mart reports 27 percent growth in topline, reaches 200-store milestone

    V-Mart Retail, India’s leading value fashion retailer,  announced its unaudited financial results for the quarter and nine months ended 31st Dec,2018 whichwere approved by the Company and Board of Directors at its meeting held on 5th Feb, 2019. The company posted robust numbers for the third quarter, recording 27 percent YoY growth in revenue from operations, 15 percent increase in EBITDA and same store sales growth (SSSG) of 11 percent. The quarterly revenue and EBITDA stood at Rs 4658 million and 733 million, respectively, up from Rs 3680 million and 640 million in the previous year. The strong topline growth was also mirrored in PAT, which at Rs 417 million, delivered 14 percent YoY growth.Festive season shopping – comprising Durga Puja, Diwali and Chhath – in the company’s main geographic markets was the primary growth driver for the quarter. In the 69-day duration from 6th Sep – 13th Nov spanning the three festivals, the company registered overall and like-to-like growth of 49 percent and 27 percent, respectively. This was achieved through revamped product assortment, supply chain, and marketing and sales strategies that the company executed effectively. The company has invested in ramping up its warehousing capacity and strengthening the talent pool at all levels.

    Riding on the back of healthy numbers in Q3, V-Mart continued to strengthen its performance for the fiscal year. On a YTD basis, revenue stood at Rs 10,892 million for the nine months ended 31st Dec, growing at 18 percent YoY, while EBITDA and PAT, at Rs 1127 and Rs 625 million, grew at 3 percent and 1 percent, respectively.

    Commenting on the company’s performance in Q3, Lalit Agarwal, CMD, said “There has been a great execution of fresh product ideas and customer connect which was amplified by strong festive demand in all our markets. V-Mart was well prepared and well-positioned to tap into this opportunity in all its key markets, delivering its value fashion promise with a wider and deeper assortment that resonated with the fashion aspirations of our customers. Launch of stores in Assam and Meghalaya further added the growth momentum for the company and the company witnessed its best ever Durga Puja sales during the quarter especially from the Bengal region. We thank all our valued customers for their trust and belief in V-Mart and look forward to their continued support.”

    While driving a strong execution focus during the festive season, the company maintained its consistent pace of retail network expansion, reaching the 200-store milestone in December. V-Mart opened 10 new stores during thequarter, andon a YTD basis, has added 29 stores with more launches planned in the last quarter. While the company took 12 years to open its first 100 stores, the journey to the next 100 has taken less than 3 years. Looking ahead, the company is building a strong pipeline of locations for targeted store expansion in the next fiscal year.

    For the upcoming Spring-Summer 2019 collection, the company shall be launching a new range of Indigo collection denims, camouflage, high fashion t-shirts, joggers, ladies tops, salwar suits, gowns, solid woven skirts for girls and kurti’s along with a new kids summer collection. The launch of summer collection and the special marriage range, with an emphasis on vibrant colors and silhouettes willgive shoppers a wide choice of fabricsand form key customer-centric highlights of the next quarter.

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  • E-commerce share to rise to 12pc from 2pc in 10 years: Walmart India CEO

    E-commerce share to rise to 12pc from 2pc in 10 years: Walmart India CEO

    Share of e-commerce is set to rise, despite the growth in brick and mortar or physical retail from 2 percent to 12 percent over the next 10 years, aided by pick up in Omnichannel format, said Krish Iyer, President & CEO, Walmart India and Chairman of India Food Forum, at India Food Forum 2019 on Tuesday. Gap between physical and digital needs to be bridged as the consumer is going digital in terms of experience as also his touchpoints, he said delivering the inaugural address at the two-day India Food Forum 2019.

    Sharing his insight at Walmart, Iyer said that by enriching customer experience, the consumer started buying Rs 180 over Omnichannel instead of buying Rs 100 from the store itself and later the ratio in the store was Rs 70 while digital was Rs 110. Calling for technology adoption as key to retail growth, Iyer enumerated four key challenges led by food security, safety & nutrition, food wastage and sustainability.

    “Feeding a rising world population of 10 billion from 7 billion amid rising death of infant children due to malnutrition, changing climatic conditions are key challenges. In India, phenomenal efforts are made on the regulatory front for safety and nutrition that will follow with awareness, compliance and enforcement of law. Significant investment amounting to Rs 92,000 crore in food processing in catchment areas is needed to overcome the wastage of 30 percent of all food and 40 percent of fruits and vegetables,” he said.

    Earlier, speaking at the forum, Ajay Macaden, Executive Director, Nielsen said, “Consumers have evolved now for omni-channel even for specific categories like milk and bakery. Increased internet and smartphone penetration has led to multiple shopping channels and change in consumer behaviour.”

    In markets around the world categories such as travel, entertainment (books, music, events) and durable goods (fashion, IT/mobile, electronics) are the front runners for consumers to enter the online retail sphere. Consumers are, however, also looking for e-commerce options for an increasing range of categories, as their more immediate needs for convenience and ease expands, Macaden said.

    Consumers in APAC (Asia Pacific) have even evolved to fresh grocery and packaged goods with China, India, Japan and Korea leading the market. In fact, packaged grocery food and fresh groceries are showing the highest percentage growth of all categories in 2018 in this region, he said.

    Other key speakers at the forum included Damodar Mall, CEO, Reliance Retail (Supermarketwala), Sadashiv Nayak, CEO Food business, Future Group, Mohit Kampani, CEO, Aditya Birla Retail, C. Gopalkrishnan, Founder, N. Supermarkets, Ramesh Menon, Former CEO, Hypercity, Mohit Anand, MD, Kellogg, India and South to name a few.

  • China’s SMCP tops 1 billion euros revenue for first time

    China’s SMCP tops 1 billion euros revenue for first time

    Chinese-owned SMCP Group said that total company sales exceeded 1 billion euros in 2018, marking a revenue-first for the French fashion group. “With double-digit sales growth in 2018, SMCP posted a remarkable performance and continued to deliver on its strategic roadmap,” said Daniel Lalonde, SMCP’s Chief Executive Officer. For the year ending December 31, SMCP recorded sales increasing 13%, in line with its previously upgraded full-year 2018 guidance.

    Lalonde said the achievement signalled rapid sales increase was fuelled by online and digital, with the company working hard to fight market headwinds, which have taken out other European retailers in 2018.

    “Our performance throughout the year, and more particularly over the last quarter, demonstrates that SMCP is built on strong foundations and further illustrates the resilience of our business model in the midst of unprecedented market headwinds,” said Lalonde, in a press release.

    “I would also like to place a special emphasis on our significant progress in digital: it has been growing consistently and strongly over the past years and now represents nearly 15% of our total sales,” he added.

    The sales growth included a solid like-for-like sales growth of 3.7% for the twelve-month period “despite challenging market conditions in the fourth quarter,” which saw sales climb less, up 8%.

    Full-year reported sales were up 11.5%, including a negative currency impact of -1.6% reflecting the appreciation of the euro.
    Over the last twelve months, SMCP net openings reached 134 points of sale, including 102 directly operated stores, surpassing its annual target. By region, 59 stores were opened in APAC alone, the zone receiving the most new outlets compared to the Americas and Europe.

    In APAC, the group posted a strong double-digit sales growth of 18.2% at constant currency, driven by mainland China which generated over 20% of sales growth.

    The operator of French fashion brands Sandro, Maje and Claudie Pierlot said Sandro sales grew 6% in 2018, while Claudie Pierlot recorded a 7% increase. Maje was the biggest grower, up 10% for the year.

    For 2018, SMCP confirmed its adjusted EBITDA margin guidance at around 17%.

    Evelyne Chetrite and Judith Milgrom founded Sandro and Maje in Paris, in 1984 and 1998 respectively, and continue to provide creative direction for the brands. Claudie Pierlot was founded in 1984 by Claudie Pierlot and acquired by SMCP in 2009.

    SMCP was acquired China’s Shandong Ruyi in 2016.

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  • Korean Air swings to net loss in 2018 from 2017 profit

    Korean Air swings to net loss in 2018 from 2017 profit

    Korean Air Lines said Tuesday it swung to a net loss in 2018 from a year earlier due to hefty foreign-exchange losses. The Korean flag carrier posted a net loss of 167.59 billion won ($150 million), after a net profit of 801.9 billion won a year earlier. As the dollar rose to 1,118.1 won at the end of 2018 from 1,071.4 won at the end of 2017, foreign-exchange translation losses reached 363.6 billion won and it cut into the annual earnings results, the statement said.

    The won’s weakness also drove up net interest costs to 454.8 billion won, up 55.5 billion won from the previous year, it said. Operating profit fell 28 percent to 676.33 billion won last year from 939.78 billion won a year ago. Sales climbed 7.7 percent.

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  • SK Innovation net falls 21% in 2018 on oil price decline

    SK Innovation net falls 21% in 2018 on oil price decline

    SK Innovation, Korea’s largest oil refiner, said Thursday that its earnings sank 21 percent last year on lower oil prices and less demand for petrochemical goods. Net profit reached 1.69 trillion won last year, compared with a profit of 2.15 trillion won a year earlier, the company said in a regulatory filing.

    Operating income dropped 34.2 percent year-on-year to reach 2.12 trillion won, while sales spiked 18.1 percent to 54.5 trillion won over the cited period.

  • LVMH’s 2018 sales revenue hits record high

    LVMH’s 2018 sales revenue hits record high

    Following a record-breaking year of sales in 2017, LVMH recently announced that it has surpassed its earnings record in 2018. The French multinational luxury goods conglomerate revealed that it made an incredible €46.8 billion EUR (approximately $53.4 billion USD) last year. Additionally, the impressive feat comes with a record net profit growth of 18 percent.

    LVMH is noting that it was the profitability of Louis Vuitton and Dior that lead to its strong 2018 earnings. The fashion and leather offerings from the two labels has been credited with driving the double-digit increase in both revenue and profit.

    Moving into 2019, it is expected that Virgil Abloh and Kim Jones will be amplifying the popularity of the two houses.

    LVMH also noted a state of reorganization of the Marc Jacobs label, and looked back on the global response to Hedi Slimane‘s inaugural collections for CELINE.

    Aside from a mixed critical reception, LVMH is ambitiously looking towards Slimane’s place at CELINE.

    The results were roughly in line with analysts’ forecasts.

    Bernard Arnault, chairman and chief executive, said LVMH expected its brands and companies, which include Louis Vuitton, Christian Dior and Moët & Chandon champagne, to deliver continued progress in 2019 in spite of “an environment that remains uncertain at the start of the year”.

    Sales growth was steady in all regions in the fourth quarter except the US — similar to the performance earlier in the year, according to Jean-Jacques Guiony, finance director.

    Organic growth in Asia, excluding Japan, was 15 per cent compared with last year. Sales in Europe were up 7 per cent on the same measure, while in the US they climbed 8 per cent.

    “We see no particular sign of a slowdown in the China market,” he said, although purchases by Chinese customers had shifted slightly to the mainland from Hong Kong and other east Asian markets, perhaps because of a weaker renminbi. “The market sees the glass as half empty. We see it as half full.”

    Luxury goods companies and other exporters dependent on sales to China are bracing for the impact of the country’s economic slowdown and for possible fallout from any worsening of the US-China trade conflict.

    In recent days, companies including US chipmaker Nvidia and Caterpillar, which sells earthmoving equipment, have blamed China’s slowing growth for disappointing profit predictions.

    Mr Guiony said luxury goods consumers tended to be affected more by sudden shocks than by gradual changes in economic conditions. “If there was to be real trade war between the US and China — and we’re not there yet — that would have an effect,” he said.

    The company also performed well in Europe, Mr Guiony said. Although LVMH had to close early on several Saturdays because of the gilets jaunes protests in France, many customers had switched to Sunday shopping and there was no obvious impact on LVMH’s numbers in the latest quarter.

    LVMH said it was stockpiling champagne and cognac in the UK in case of severe disruption from a “no-deal” Brexit.

    “We’ve added four months of stock in the UK,” said Philippe Schaus, head of Moët Hennessy, the wines and spirits part of the group.

    Profit from recurring operations in fashion and leather goods, the core of LVMH’s business, rose 21 per cent last year, accounting for €5.94bn of the total. The highest growth in profit from recurring operations came from watches and jewellery, at 37 per cent, and the slowest from wines and spirits, at 5 per cent.

    The company said it planned to lift the total dividend by 20 per cent for the year to €6.

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  • Grofers crosses Rs 300 cr sales in single month

    Grofers crosses Rs 300 cr sales in single month

    Grofers, the low price online supermarket, announced the record revenue of Rs 310 crore in January 2019. With this, Grofers became the first online grocer to cross Rs 300 crore in monthly sales and also became the largest e-grocery company in the fast growing space. Aligned with its aim to drive the next wave of growth for e-commerce sector, the company has brought 2.5 lac new customers to its platform in January. The brand is eyeing a revenue target of Rs 2,500 crore for FY 2019.

    On the back of the industry’s biggest grocery sale – Grand Orange Bag Days, Grofers recorded an average of 14 lakh visits per day on the app. During this period, a total of 1.81 crore items worth Rs 207.5 crore were sold. With an average ticket size of Rs 2,640 and 20 items per cart, Grofers recorded highest customer engagement in Delhi NCR followed by Mumbai and Bengaluru.

    Speaking on the success Albinder Dhindsa, Co-Founder and CEO, Grofers said, “We are excited to emerge as India’s favourite e-grocer. We have received a tremendous response in the Grofers Orange Bag Days sale and we will sustain the momentum going forward. We are geared to bringing better priced grocery products to 100 million customers and this is just the start.”

    Customers received jaw dropping offers during Grofers Grand Orange Bag Days sale. Grocery and staples were the highest selling items followed by household items (detergents and dishwash bars) and personal care products. During this time period, Grofers recorded a 80 percent increase sales of Grofers branded products as well.

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  • Apple sales and profit slip as demand falls

    Apple sales and profit slip as demand falls

    Tumbling iPhone demand drove an uncharacteristic decline in Apple sales in the first quarter trimming back its profit for the period. Sales of its iPhone range slumped 15 per cent year on year, and although burgeoning revenue from services like digital media subscriptions – up 19 per cent to a new high of US$10.9 billion – and other products compensated, total sales were down 5 per cent to $84.3 billion.

    Sales in China slumped 26.6 per cent during the period.

    Net income fell by $100 million, from $20.065 billion in the December 2017 quarter to $19.965 billion in the latest quarter. While the company championed setting “an all-time earnings per share record” that was a consequence of a share buyback program reducing the share pool rather than an improved bottom line.

    Commenting on the results, GlobalData Retail MD Neil Saunders said while Apple is still a money-making machine, the sales decline “symbolises a company that is starting to run out of steam”.

    “In our view, this is something to be corrected, not least because Apple is a costly company to run and it relies on strong revenue growth to drive up the bottom line. As this quarter’s figures show, failure to achieve that results in profit erosion.”

    Saunders said the slowdown in iPhone sales reflected Apple’s inability to come up with meaningful and valuable innovations that wow consumers.

    “The latest iPhones might be works of art from an engineering perspective, but they are essentially incremental products that lack the excitement and newness of earlier models. With the higher price points of top-end models, consumers expect a lot more for their money. The blunt truth is, Apple’s latest line up of phones doesn’t do that much more than the generations that came before.”

    He said the slowdown in China is a problem Apple shares with many other companies.

    “The country is suffering from more sluggish consumer demand which has put the brakes on retail growth rates across many sectors. However, the issue for Apple is that this has coincided with a rise in competition from local phones and devices which has helped to eat into its own growth. In short, China is no longer the engine of growth for Apple that it once was and this makes Apple uncomfortably more reliant on mature markets to drive revenues. Some of those markets, like Europe, are also not delivering – thanks to very high price points and consumers that are hesitant to spend on big-ticket items.”

    From must have to might buy

    Saunders said Apple’s iPads and some of its Macs are good, quality items, however they are simply not impressing the market and Apple is losing its lustre in terms of producing compelling products.

    “In our view, Apple has moved from a position of ‘must have this and must have it now’ to ‘might buy this at some point in the future’. Price increases may mitigate this but, ultimately, such a shift can only ever result in a softer sales performance.”

    While services are performing well, Saunders said Apple must push much harder.

    “Amazon is successfully creating an ecosystem of services through Prime. Apple needs to do something similar by building on its Apple Music subscription and its App Store offering. Movies and television content are also needed to propel sales.

    “In our view, Apple should seriously consider a big acquisition such as Netflix. Content is a big growth area and is becoming increasingly linked to devices. Apple needs to play more heavily in this space both to generate new opportunities but also to defend its own device business.”

    While Apple remains a solid and financially successful company, he said, a lack of serious and significant innovation means it runs the risk of diluting future earnings.

    “Apple thrives off serving a mass market; at the moment its moves to provide more expensive items to fewer people will ultimately do further harm to the bottom line. The clear blue water that once existed between Apple and its rivals is much diminished. The company has time to reopen the gap, but to do so, it needs to pull something new and unique out of its hat sooner, rather than later.”

    Cook’s positive spin

    Apple CEO Tim Cook delivered a positive spin on the results: “While it was disappointing to miss our revenue guidance, we manage Apple for the long term, and this quarter’s results demonstrate that the underlying strength of our business runs deep and wide. Our active installed base of devices reached an all-time high of 1.4 billion in the first quarter, growing in each of our geographic segments. That’s a great testament to the satisfaction and loyalty of our customers, and it’s driving our services business to new records thanks to our large and fast-growing ecosystem.”

    At the end of the quarter, Apple’s net cash balance was $130 billion.

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  • Gold scales 8-month peak on Fed rate pause hopes, trade woes

    Gold scales 8-month peak on Fed rate pause hopes, trade woes

    Gold prices edged up on Wednesday to hit their highest since May, supported by uncertainty over U.S.-China trade relations and expectations the U.S. Federal Reserve will keep rates on hold later in the day. Spot gold was up 0.2 percent at $1,313.91 per ounce by 0245 GMT, after touching its highest since May 15 at $1,314.10 early in the session. U.S. gold futures rose 0.3 percent to $1,312.30 per ounce.

    “For the short-term gold is going to move higher as the Federal Reserve will have a dovish tone, which should weaken the dollar and give gold a bit of a move up,” said INTL FCStone analyst Edward Meir.

    The absence of an agreement in U.S-China trade talks should also benefit gold, he said.

    Investors are waiting on the Federal Reserve’s policy decision later in the day, with expectations officials will reinforce their recent dovish stance given a stalemate on global trade, signs of a slowdown in the U.S. economy, and waning business and consumer confidence.

    The Fed raised interest rates four times last year.

    Investors are also concerned that criminal charges against China’s Huawei Technologies Co. Ltd. for violating U.S. sanctions against Iran could complicate U.S.-China trade talks.

    China’s Vice Premier Liu is due to meet with U.S. Trade Representative Robert Lighthizer later in the day.

    “Gold also looks good on the charts … Physical demand seems to be improving in some markets and ETF buying has been increasing. In general the path of least resistance is probably higher from here,” Meir said.

    Underscoring investor interest in the bullion, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 1 percent to 823.87 tonnes on Tuesday, to their highest since June.

    SPDR gold holdings have risen 4.6 percent so far this month, their best since September 2017.

    “A combination of falling treasury yields, anxiety over Brexit and Venezuela is all helping gold,” said Nicholas Frappell, global general manager at ABC Bullion.

    British lawmakers rejected most amendments that aimed to keep Britain from leaving the European Union without a deal, reviving worries of a chaotic withdrawal from the trading bloc that would damage the UK economy.

    Silver rose 0.3 percent to $15.88 per ounce, having hit its highest since July 2018 at $15.92 in the prior session.

    Palladium fell 0.2 percent to $1,343.50, while platinum was up 0.4 percent at $813.

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  • Bursa Malaysia’s Q4 earnings fall 6.2% to RM51.9m

    Bursa Malaysia’s Q4 earnings fall 6.2% to RM51.9m

    Bursa Malaysia Bhd’s net profit in the fourth quarter ended Dec 31, 2018 (Q4FY18) was down by 6.2% to RM51.9 million, from RM55.27 million a year ago, mainly due to lower contribution from the securities segment.

    Revenue for the quarter declined 8.7% to RM128.9 million, compared with RM141.2 million in the previous corresponding quarter.

    The exchange has approved a second interim dividend of 11.6 sen per share for FY18, amounting to about RM93.7 million which is payable on Feb 28, 2019. With that, the total dividend (including special dividend) declared for the year amounts to 33.6 sen per share.

    Bursa’s full-year net profit was slightly up by 0.4% to RM224.04 million, from RM223.04 million a year ago, while revenue decreased by 1.2% to RM550 million, against RM556.8 million previously.

    For the year under review, securities market trading revenue increased 2.4% to RM265.8 million from RM259.6 million in FY17, mainly due to higher average daily trading value (ADV) for securities market’s on-market trades (OMT) in FY18.

    However, non-trading revenue saw a marginal decrease of 0.1% to RM165.9 million from RM166.1 million in FY17 due to lower listing and issuer services revenue.

    Bursa CEO Datuk Seri Tajuddin Atan said despite market volatility and challenging global economic environment, the exchange’s financial performance remained resilient.

    “Throughout the year, to create a more facilitative environment, we continued implementing initiatives to further enhance the vibrancy and liquidity of the market,” he added.

    At 2.35pm, Bursa’s share price was trading 7 sen or 0.9% lower at RM7.32 on 751,900 shares done.

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  • Starbucks China sales grow – with a but

    Starbucks China sales grow – with a but

    Net revenues for Starbucks China and Asia-Pacific region soared 45 per cent in the first quarter to US$1.2 billion. While a change of ownership in the East China business at the end of the first quarter of the previous year boosted the figure, the company says the opening of a net 1010 stores during the 12 months – a 13 per cent increase in the network – and a 3 per cent increase in same-store sales also played a part.

    First-quarter Starbucks China operating income rose 13 per cent to US$225.1 million, from $196.8 million. But the company’s operating margin declined 530 basis points to 18 per cent, primarily due to the impact of the East China ownership change.

    CEO Kevin Johnson said the company delivered solid operating results in the first quarter, demonstrating continued momentum in the business, as it drives a growth-at-scale agenda “with focus and discipline”.

    “Comprehensive efforts to streamline our business have allowed us to focus on three key strategic initiatives that position Starbucks for long-term success: accelerating growth in our targeted markets of the US and China, expanding the global reach of the Starbucks brand through our Global Coffee Alliance with Nestle, and increasing shareholder returns.

    “Combined with our efforts to build and amplify the Starbucks brand, we expect these initiatives will position the company to drive predictable, sustainable growth and shareholder returns for years to come,” concluded Johnson.

    In the 13-week first quarter, which ended December 30, global comparable-store sales increased 4 per cent, driven by a 3 per cent increase in the average sale. Americas and US comparable-store sales increased 4 per cent, with transaction numbers flat.

    China-Asia-Pacific comparable-store sales increased 3 per cent, including 1 per cent transaction growth, with China comparable-store sales up 1 per cent, but the number of transactions down 2 per cent.

  • Hyundai Mobis net swings to positive in Q4

    Hyundai Mobis net swings to positive in Q4

    Hyundai Mobis, Korea’s biggest auto parts maker, said Friday it shifted to net profit in the October-December period due to a low base effect. A net profit of 419.8 billion won ($374.1 million) was achieved for the three months that ended in December, from a net loss of 168.6 billion won a year earlier, the company said in a statement. The result was helped by the high level of corporate taxation reflected in the bottom line for the last quarter of 2017, but there were no such one-off outlays in the final three months of last year, a company spokesman said.

    Operating profit jumped 82 percent to 581.7 billion won in the fourth quarter from 319.4 billion won a year ago.

    Sales rose 9.3 percent to 9.644 trillion won from 8.822 trillion won during the same period.

    In the fourth quarter of 2017, operating profit was hit hard by a diplomatic row between Seoul and Beijing over the deployment of an advanced U.S. missile defense system, called Thaad, in Korea.

    Operating profit in the last quarter of 2018 rebounded following the easing of bilateral tensions.

    Sales climbed on the back of increased exports of high-end auto components and higher parts sales in after-sales markets despite the won’s strength against the dollar and currencies in emerging markets, the statement said.

    For the whole of 2018, net profit rose 21 percent to 1.888 trillion won from 1.558 trillion won a year earlier. Operating profit remained unchanged at 2.025 trillion won compared to a year ago. Sales also changed little to 35.149 trillion won versus 35.145 trillion won, it said.

  • Vietnamese banks report plunge in profits

    Vietnamese banks report plunge in profits

    While profit across the banking sector grew by an estimated 40 percent last year, VietinBank, LienVietPostBank and SaigonBank have reported steep declines. The biggest surprise came from state-owned VietinBank, the country’s second biggest lender by assets, which reported a 25 percent fall in profits before tax to go out of the group of five most profitable banks in the country.

    Le Duc Tho, its chairman, said this was a result of having to restrict operations last quarter to begin restructuring.

    Asset growth, credit growth and capital mobilization grew by 6-10 percent, lower than targeted.

    LienVietPostBank reported a 30 percent decline in profit before tax as a result of losses related to securities investments and low marginal interest rates.

    It achieved losses of nearly VND5 billion ($215,140) from securities investments whereas in 2017 it had made a profit of VND380 billion ($16.35 million).

    SaigonBank’s profit before tax fell by more than 26 percent due to provisioning for bad debts. The bank had to increase provision for bad debts by 22 percent to an amount equivalent to 87 percent of its profit from business operations.

    Its bad debts doubled in the first half of 2018 to nearly VND900 billion ($38.72 million), but by the end of the year it brought the rate down from 6.48 percent during mid-year to 2.2 percent. It involved provisioning of VND287 billion ($12.35 million).

    HSBC Vietnam CEO Pham Hong Hai said from 2019 bad debts could reemerge as a problem for banks after the recent lending spurt and the instability of the global financial markets.

    As a result, banks’ profits would most likely see a downward trend this year, he warned.

    The State Bank of Vietnam targets credit growth of 14 percent this year, the same as last year, and keeping non-performing loans to below 2 percent.

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  • At Kia, sales go up, but profit doesn’t follow

    At Kia, sales go up, but profit doesn’t follow

    Kia Motors’ sales expanded last year, but profits faltered. Korea’s second-largest carmaker by sales said Friday it posted 94.3 billion won ($84 million) in net profit for the fourth quarter last year, a 10 percent drop year on year.
    Though the carmaker’s revenue in the fourth quarter increased by 3.6 percent to 13.47 trillion won due to increased sales, the company said the Korean won’s strength against the U.S. dollar dragged down profits.

    A similar trend is evident in the company’s annual earnings report. The company posted 54.17 trillion won in revenue for the whole of last year, a 1.2 percent increase from the previous year. Global sales also increased by 2.4 percent during the year, selling more than 2.8 million units.

    Despite expanded sales, the company’s net profit was limited to 1.16 trillion won, a 19.4 percent jump from 2017, but still below market expectations or the company’s average profit recorded between 2014 and 2016.

    Profit in 2017 fell to below a trillion won due to a one-off cost of around a trillion won that was reflected that year after a local court ordered the company to make an overdue payment to employees.

    The goal this year for Hyundai Motor’s sister company is to ramp up profitability, especially in the U.S. and Chinese markets, with new car launches and stronger SUV lineups. The automaker also plans to tackle emerging markets like Russia and India with localized models.

    Kia is betting big on its Telluride SUV to turn its business around in the U.S. market. The largest SUV yet in Kia’s lineup will launch in the United States during the first half of this year.

    “As we launch new cars in the U.S. market including the Telluride SUV and new Soul crossover and diversify our product mix, we expect our profitability to improve,” said Joo Woo-jeong, chief financial officer at Kia, during a conference call with analysts on Friday. “The Telluride SUV was well received at the Detroit Motor Show and its image as an off-roader fits well with demands in the U.S. market.”

    The SUV was recently introduced during the North American International Auto Show in Detroit.

    For China, Joo said Kia will strengthen its local dealer network and better manage car inventories there to improve business. The company is also planning on launching dedicated SUV models for the Chinese market. While Kia sold 370,000 cars in China last year, it hopes to sell 410,000 cars this year based on the new strategies.

    Joo admitted that “China is the most difficult market for Kia” at the moment. Kia plans to sell a total of 2.92 million cars this year, a 3.9 percent increase from last year.

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