Despite Q3 loss, Serm Suk's net jumps 128.5% in first 9 months
Serm Suk yesterday reported a loss of more than Bt120 million in the third quarter due to an allowance for devaluation of unusable glass bottles, in the amount of Bt478 million, after the expiry of its bottling and distribution contract with PepsiCo on No
However, the company posted more than Bt738 million in net profit in the first nine months, up 128.5 per cent from the same period of last year.
Chief executive officer Somchai Bulsook said the loss in the third quarter was also a result of higher sales costs, which were up by Bt520.1 million, or 11.5 per cent, which was higher than the sales increase, which was only Bt337.1 million or 6 per cent.
The key factors in this differential included the allowance for devaluation of unusable bottles valued at Bt478 million, a consequence of the expiry of the exclusive bottling appointment with PepsiCo, as well as higher sales expenditure by Bt90 million or 9 per cent caused especially by a significant increase in marketing costs.
He said the company earned a higher share of profit from investing in affiliate companies, amounting to Bt68.8 million, mainly from revenue recognition from flood-insurance claims.
Excluding the allowance for the bottle devaluation, the company would have seen Bt357.2 million in net profit in the third quarter.
Serm Suk achieved Bt738.7 million in net profit in the first nine months of the year, up Bt415 million from the same period in 2011. Revenue increased by Bt1.54 billion or 8.9 per cent thanks to higher sales, while sales and management expenditures decreased by Bt74.9 million or 2.4 per cent, which the company attributed to cost-control measures and improved efficiency.
The company’s share of profit earned from investing in affiliate companies increased by Bt125.7 million in the first nine months. Excluding the bottle devaluation, the net profit would be Bt1.21 billion for the period.
The improvement of operating results for the nine-month period ended September 30 reflected basic earnings per share of Bt2.78, or an increase of Bt1.56 compared with the same period of last year.
Serm Suk last Friday officially launched its own cola drink in the Thai market. Branded est, the new beverage is expected to generate Bt8 billion in sales in the first 12 months of operation.
