Wonderfarm brand revival – exiting accumulated losses after many years

Wonderfarm is revived under the hands of “giant” Kirin from Japan

Revived under the "golden hand" Kirin from Japan, Wonderfarm brand owner escaped accumulated losses after many yearsRevived under the "golden hand" Kirin from Japan, Wonderfarm brand owner escaped accumulated losses after many years

 

In the beverage and beverage industry, it is not difficult to name big-name companies and enterprises such as Coca Cola, Suntory PepsiCo, Tan Hiep Phat… Despite having a smaller market share,  Food Joint Stock Company international (Interfood, UPCoM: IFS ) still recorded many successful marks. In particular, the company entered the top 10 prestigious beverage companies in 2020 – Industry group: Non-alcoholic beverages (beverage, tea, coffee…) besides many other international and long-standing brands.

Interfood (Formerly International Food Processing Industry Company – IFPI) was established on November 16, 1991. IFPI is a 100% foreign invested company, the original investor is Trade Ocean Holdings Sdn. Bhd (headquartered in Penang, Malaysia).

In the midst of a thriving business, a big incident happened to Interfood in 2008 when some of the company’s bakery products had melamine content exceeding the permissible level. Also in 2008, the company reported a loss of 267 billion dong and extended its losing streak after that.

In the difficult context, in 2011, the main shareholder of Malaysia transferred all 57.25% shares of Interfood to Kirin (a large food manufacturing corporation in Japan). Since taking over, Kirin has taken many measures to improve IFS’s debt structure, and at the same time develop and research new products and markets for the company.

After going through a period of severe crisis from 2008-2015, with 7/8 years of losses, Interfood under the restructuring hand of Kirin group started to be profitable in 2016 and since then, the company more and more profitable.

Revived at the hands of “giant” Kirin from Japan

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In its annual report 2021, IFS emphasizes its vision to 2027 “Life Partner”. Interfood aims to become the beverage company that contributes the most to the mental and physical health of Vietnamese people by providing safe, secure, high-quality and innovative products and services.

Interfood has grown well when focusing on its flagship product Wonderfarm squash tea when there is no worthy competitor. In addition, Interfood also has a number of other products such as Yen Ngan’s water or bakery products, and drinks from the Japanese KIRIN brand such as Ice+ fruit juice, Latte, Tea Break.

The corporate restructuring efforts of the Japanese giants have gradually yielded sweet results. In 2016, Interfood officially ended a series of 5 consecutive years of losses when it reported a profit of VND 43.4 billion. Notably, trading resumed on Upcom of IFS in 2016. Before that, in 2013, Interfood was forced to delist due to a loss.

Revived under the golden hand of Kirin from Japan, the owner of the Wonderfarm brand escaped accumulated losses after many years - Photo 1.Revived under the golden hand of Kirin from Japan, the owner of the Wonderfarm brand escaped accumulated losses after many years - Photo 1.
Revived under the golden hand of Kirin from Japan, the owner of the Wonderfarm brand escaped accumulated losses after many years - Photo 2.Revived under the golden hand of Kirin from Japan, the owner of the Wonderfarm brand escaped accumulated losses after many years - Photo 2.

In the period 2017-2019, IFS’s profit increased steadily, exceeding 2 digits each year compared to the plan set out each year. Accumulated loss has been continuously improved, especially in 2020, despite the impact on revenue and profit, EAT still reached 155 billion dongs, helping to reduce accumulated loss sharply. By the end of 2020, the accumulated loss of IFS is about 108 billion VND. Thanks to favorable business results in 2021, the company got rid of accumulated losses after many years and made a profit.

Looking back in 2021, the company’s sales revenue reached 85% compared to the previous year in the context of the raging pandemic negatively affecting the economy. Revenue from financial activities increased 3 times compared to the plan to over 7 billion dongs. Selling and administrative expenses were maintained at a reasonable level with 19% of net revenue, flat over the same period; Administration expenses were close to the plan, accounting for about 3% of net revenue. As a result, the Company’s total profit after tax reached VND 126 billion, down 19% compared to 2020.

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Regarding production and business activities in the first quarter of 2022, this period Interfood has had positive changes and gradually recovered after the effects of Covid 19. Specifically, Interfood recorded a profit after tax of VND 28 billion. However, sales revenue decreased 2% to VND 356 billion due to many affected areas, resulting in a 3% decrease in net revenue compared to the same period in 2021. The company explained due to resonance from raw material prices. Due to the instability of the world situation, costs have been incurred, and product prices have been pushed up, so gross profit decreased in the first quarter of this year.

Will consumption grow strongly in the second half of 2022? 

In 2022, Interfood focuses on recovering from the sales declines impacted by Covid 19 over the past two years. Accordingly, the company targets total sales to reach VND 1,769 billion, up 35% and profit after tax to reach VND 173 billion, up 38% compared to 2021.

Regarding specific development directions, the company increases sales of Winter Melon Tea, Ice + and Latte are priority brands by maximizing effective marketing strategies. In addition, the company also penetrated the market through the iMuse brand to contribute to the Vietnamese people’s health. At the same time, the company invests in factory facilities and logistics network, building a more stable and efficient SCM (supply chain management) system.

In a recent report, SSI Research points to opportunities for the F&B industry in 2022. Specifically, demand recovers thanks to reopening, consumers have an increasing taste for high-end products and products. organic or convenience packaged products. Like the modern trade channel, which currently accounts for 10%-15% of F&B revenue, maintaining a strong growth momentum will bring advantages to the food and beverage industry.

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SSI Research estimates that demand will recover gradually when Vietnam already has a high rate of vaccine coverage. In addition, as the risk of a new variant is still present, consumption (especially direct consumption by F&B stores) and F&B-related services, such as tourism & entertainment, may not recover strongly. strong in the first half of the year. SSI Research estimates that consumption will grow slightly in the first half of the year and stronger in the second half of 2022 thanks to the gradual reopening under the baseline scenario.

On the stock exchange, IFS shares are currently trading around the threshold of 23,000 VND/share, equivalent to a market capitalization of more than 2,000 billion VND. However, because the shares are held almost entirely by the major shareholder, Kirin, with a ratio of nearly 96%, the liquidity of IFS on the stock market is quite low, even without trading in many sessions.

Source: CafeBiz

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