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ThaiBev's net profit to fall 23.76% to $1.1b in 2018


No thanks to higher excise tax.

DBS Equity Research reported a forecast of Thai Beverage Public Company (ThaiBev)’s net profit of $1.1b this year, down by 23.76% from $1.45b last year.

The forecasted decrease is backed by the looming hikes in excise tax, which makes up over 50% of ThaiBev’s revenue.

“A change in excise tax would impact the share price, and depending on whether the group is able to pass on the cost increases to consumers, its share price could be positively or negatively affected,” DBS Research said.

Thailand’s political situation may also affect ThaiBev’s earnings.

“A change or deterioration in the uncertain political situation in Thailand could have an adverse impact on the broader economy and private consumption,” DBS Research added.

Meanwhile, revenue is expected to increase from $7.97b to $8.82b this year.

Here’s more from DBS Research:

Turnaround in NAB will aid growth. Management targets to achieve EBIT breakeven for NAB by FY18F. We are forecasting earnings turnaround for NAB in FY19, which will aid overall profit growth. This segment still incurred net losses as of FY17F, but it has narrowed on an y-o-y basis. We expect this trend to continue into FY18F, before achieving marginal profit in FY19F. An achievement of breakeven will contribute to bottom-line growth for the group.

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