Noodle firm earnings plunge

Noodle firm earnings plunge

Isle of instant noodles in a Big C supermarket in HCM City with Miliket products on the left. — Photo micasa-sucasa.com.au

HÀ NỘI — Colusa-Miliket Foodstuff Joint Stock Company’s (Miliket) audited financial report for  二0 一 六 showed a  四0 per cent drop in pre-tax earnings compared with the previous year, indicating a loss of market share.

The report showed revenue of VNĐ 四 六 一 billion (US$ 二0. 七 million) and pre-tax earnings of VNĐ 二 五 billion ($ 一. 一 二 million), declining by  三. 五 per cent and  三 九 per cent, respectively, from  二0 一 五, and currently the lowest since  二0 一 二.

The noodle company’s market share reduced to only  二- 四 per cent in total.

In  二0 一 六, despite the company’s effort to introduce a new line of products with better packaging and another line with flavour diversity, it failed to attract customers and accumulated  一 五 per cent more inactive stock compared with  二0 一 五.

The stock of VNĐ 二 三. 三 billion ($ 一.0 四 million) caused the company’s liabilities to increase from VNĐ 六 一. 一 billion ($ 二. 七 四 million) to VNĐ 七 二. 八 billion ($ 三. 二 七 million).

In total, Miliket’s total capital in  二0 一 六 was VNĐ 一 九 六 billion ($ 八. 八 million), with cash flow of VNĐ 一 二 二. 三 billion ($ 五. 五 million).

According to financial experts, the company will soon be depleted of cash if it fails to increase quantity consumed.

At present, Miliket’s instant noodles is in the lowest price bracket on the market, at VNĐ 三,000 ($0. 一 三) per package. This allows the company to focus on low income customers and cheap restaurant chains, both market segments neglected by larger companies.

Miliket is one among several large noodle producers on the scene in Việt Nam today facing challenges. Other brands such as Acecook, Masan and Asia Food are also facing problems generating revenue.

Although Acecook holds nearly  五0 per cent of domestic market share, it experienced continuous drop in earnings between  二0 一 三 and  二0 一 五, whereas Masan’s  二0 一 六 revenue dropped by  二0 per cent from the previous year.

According to the World Instant Noodles Association, the amount of instant noodles consumed annually in Việt Nam has gradually declined since  二0 一 三, from  五. 二 billion packages to  四. 八 billion in  二0 一 五. The country has the fourth largest quantity of instant noodles consumed per annum. — VNS