Good evening, everyone, and thank you for joining the Thai Beverage Fiscal Year 2024 results call. All participants have been placed in a listen-only mode. Later, we'll conduct a question-and-answer session, and instructions will be given at that time. I will now hand over the call to the presenters, Ms. Namfon Aungsutornrungsi, Thai Bev's Head of Investor Relations, and the members, Thai Bev's Senior Management Team. Thank you.
Good evening, ladies and gentlemen. Welcome to Thai Beverage Full Year 2024 and the 30th of September 2024 Financial Results Conference call. I am Namfon Aungsutornrungsi, Head of Investor Relations. For the call tonight, I will start with the summary of the full year results. Then we will open the line for Q&A with our management team here.
For the summary of the full year results, on 28th of September 2024, InterBev Investment Limited, or IBIL, an indirectly owned subsidiary of Thai Bev, completed a share swap transaction with TCC Assets Limited, or TCCAL. The transaction resulted in an increase in IBIL's percentage interest in Fraser & Neave Limited shares from 28.31% to 69.64%, making Thai Bev the holding company of F&N and ceased to hold any interest in Frasers Property Limited.
As IBIL and TCCAL are under common control of the same ultimate controlling shareholder, the transaction is accounted for as a business combination under common control. Accordingly, the group's full year 2023 consolidated financial statements have been restated for comparative purposes. Total sales revenue of the company for the fiscal year ended 30th September 2024 was THB 340,289 million, an increase of 2.2% when compared to the same period last year, driven by growth across all beverage and food segments.
Net profit was THB 35,270 million, an increase of 0.6% compared to the same period last year. This was due to an increase in net profit from the beer business, non-alcoholic beverage business, and other businesses, partly offset by a decrease of net profit from spirits and food business.
The board of directors has proposed a dividend for full year 2024 of THB 11,810 million, or THB 0.62 per share, which is higher than last year. This translates to a payout ratio of 53.9% of profit attributable to shareholders, which includes net profit of F&N Group attributable to former shareholders during the year based on the group's percentage interest received for business restructuring under common control. Please note that the interim dividend was paid in June 2024 at THB 0.15 per share.
Therefore, the final dividend will be THB 0.47 per share. In 2024, the spirits business reported sales revenue of THB 120,728 million, up 0.8% year on year. This was driven by an increase in sales volume of white spirits, as well as robust performance in the Myanmar market, which showed improvement in both sales revenue and EBITDA.
However, higher raw material costs, increased investment in brand and marketing activities led to a 4.6% year-on-year decline in net profit to THB 21,385 million. The beer business recorded sales revenue amounting to THB 126,332 million in 2024, an increase of 2.4% year on year, supported by rebound in tourism and higher beer consumption due to the warmer weather in Thailand, with lower raw material costs, improved operational efficiencies, and effective brand and marketing investments.
The beer business achieved a net profit of THB 5,221 million, a 3.9% increase compared to the previous year. The non-alcoholic beverage business saw a 4.2% year-on-year rise in sales revenue to THB 65,802 million in full year 2024. This was due to a higher sales volume across all categories as a result of successful brand building from distribution expansion and effective consumption campaigns.
Despite higher investment in brand and marketing activities, the business posted 9.3% year-on-year growth in net profit to THB 5,934 million, supported by lower packaging costs, favorable commodity price, and enhanced production efficiency. In 2024, the food business registered a 5.5% year-on-year increase in sales revenue to THB 22,288 million, driven by the opening of new stores. However, the net profit fell to THB 301 million due to a combination of higher raw material costs, increased operational expenses, and investments to enhance brand visibility and accessibility.
Additionally, the results were further impacted by a decrease in one-time fair value gains from the remeasurement of F&N's investment in Cocoland in the prior year. In 2024, the group's other business registered a decline in sales revenue from publishing and printing business of 6.6% year-on-year to THB 5,400 million.
This was mainly due to a decrease in sales revenue from lower international printing demand and the closure of unprofitable business units. Net profit, which includes a share of profit of investment in Frasers Property Limited, was THB 2,429 million. This is the summary of our fiscal year 2024 financial results. Now we will open the call to any questions on our results. Operator, please help open the line for Q&A.
Thank you. We now begin the question-and-answer session. Participants with questions to pose, please press star 11 on the telephone keypad, and you will be placed in a queue. To cancel the queue, please press star 11 again.
Hello. Hi. Hi, Lathan.
Our first question comes from the line of Lathan Tan from UOB. Please go ahead.
So I'll just repeat. So my first question is for the beer, the cost of goods. So I see that it has fallen about 0.6 percentage points, the sales revenue. So I just want to see what's the outlook or do you expect this to go to fall moving forward? Then also, I see that the SG&A has also fallen. So is that due to, do you see lesser competition, or do you have to spend more, or do you see it's just better cost efficiency? Then the next question is about the spirits. So can I just have an update about the brown spirits? So I see that revenue is.
Hello, Lathan. We couldn't hear you.
Sorry, Lathan was somehow muted. Just give me one second. Let me. I'm sorry to let you know that Lathan's line has got disconnected. Oh, he's back. Just give me one second. Lathan, your line is open?
Wait, wait.
There you go.
Okay.
Yeah, please go ahead.
Yeah, okay. So for the beer, I see that the cost of goods has fallen. So I just want to know what's the outlook going forward, and do you expect it to go? Do you expect it to trend downwards? And the SG&A as well, is it because of lesser spending, because of lesser competition, or is it just cost efficiency? Then for the spirits, I just want to know what's going on with the brown spirits. So could you share some color on the brown spirits? Thank you. Hello?
Okay. Hi. This is Songwit from ThaiBev Thailand. So if I understand your question completely, there are two things. Number one is, what is the reason behind the decreasing of the cost of goods? And the second question is, what is the reason behind the decreasing of the cost of SG&A? So for the first one, we say that we see that from last year, we see that yes, we have the lower raw material cost, and we also have the improvement of the operational efficiency.
And then for the outlook for this year, we still see in the positive trend. And for the second question, I would say that we didn't have the less competitors. The beer market in Thailand is still very intense. All the competitors still playing on the ground. So the reason that we have lower SG&A is mainly due to the more efficiency for the investment in the A&P and the control of our overhead. So hope that that will answer your questions.
Yep. Thank you.
Lathan, hi, this is Lester here. Let me just give you a little bit of background into the Vietnam COGS as well as SG&A. COGS actually for us remains fairly high. We are still using the hedged materials from a couple of years ago. This should run out by our Q1 next year, the first quarter March next year. So moving forward, I think trending, it should be better. SG&A, of course, it continues to be very competitive in Vietnam.
But what we've done is we have made our spending more efficient. I think in the SABECO call last week, I was explaining how we use an ROI model for A&P activities. And so we have reclassified a lot of our activities to make sure that we spend only on the more efficient ones. And so while we gain share, we've been doing it at a lower cost.
Okay. Lathan and Sithichai Chaikriangkrai, Group CFO. Just to sum up, the cost of goods generally in Thailand for beer have already come down, and we have high efficiency in spending contributing to a lower SG&A. For Vietnam, we are expecting to have a lower cost of goods coming up in the next six months. So the trending downward would be and continue to be fairly efficient in terms of spending and controlling our SG&A. So that's the general answer on the beer side. But on the spirits side for the brown spirits, well, I think in Thailand, over the past 12 months, as we reported, we have quite decent widespread volumes. And as for brown spirits, it has a small decline due to consumption set lower year on year. And the year before, we had a good increase.
So this one is lower back to the base of a year earlier. So that's generally what happened. We start to see an increase or improvement towards September now into October month and November month. So we are expecting the brown spirit to give us a low single-digit growth coming up in this few months as well.
Okay. Thank you.
Thank you. Our next question comes from the line of Chee Zhen Feng from DBS. Your line is open. Please go ahead.
Thanks for the presentation. So just two questions for Mike. So firstly, maybe on BeerCo, could you share about any updates regarding partnerships or potential IPO, the BeerCo IPO? A bit of color on that. And number two, maybe a bit more color in terms of your strategy in the food and non-alcoholic beverage front, given this recent share swap and a few other acquisitions you have done in Thailand. Yeah, maybe just these two questions. Thank you.
Michael, can you help answer for the BeerCo IPO, please?
I think while we are waiting for Mike, hi, this is Kosit. I'll be answering on the NAB questions. Regarding the synergy after the share swaps, I think what we have put in the paper earlier, I think we do expect a synergy in terms of the volume aggregations of how we procure raw materials and also on the supply chain cost.
And the other part is on the R&D because we started to do all the combining our research development initiative altogether, and that would probably help reduce our cost of the R&D. Yes. The second, I think, synergy we are expecting is the joint of the retail market. I think the infrastructure network in Thailand is very that we have a very extensive infrastructure, especially in retail market. So combining this will probably ensure us a better distribution capabilities of our NAB products.
And I think the last part is that I think we do expect that we'll be able to bring some of the products from F&N into other markets as well. I think we'll be having a new product launch for this coming year. All right. Thank you.
Hi. Can you hear me now?
Yes, we can hear you, Kang.
Okay, great. Okay. The question on the DEARCO IPO, well, just as an update, as you know, with the recent interest rate cuts in the U.S. and the result of the U.S. elections, the markets have turned rather optimistic, and there have been a lot of IPO activity in Asia-Pacific. So this is the time that we're going to start to evaluate whether we should, in fact, relaunch our IPO. I would say that this is subject to assessment of the current conditions. And at this point in time, we have no concrete plans, just to be clear. But as soon as we make a decision, Thai Beverage will make an announcement at the appropriate time. Okay. So I hope that clarifies that because it's an often-asked question these days.
On the second part about strategic partnerships, we continue to engage with several potential strategic partners, but nothing has materialized at this point in time. It is the normal course of our business. We are always regularly in touch with peers and potential partners from all sorts of segments. We will continue to explore opportunities with them. Once again, when we have anything concrete in this area, Thai Beverage will also make an announcement. I hope that's sufficient to address your questions. Thank you very much.
Yep. Hi. Yeah. Thank you. Thank you, Michael. That's very helpful. Thank you. Yeah, I will jump back into the queue. Thank you.
Thank you. Thank you. Our next question comes from the line of Xuan Tan from Goldman Sachs. Your line is open. Please go ahead.
Hi. Great. Thank you. Can you hear me?
Yes, we can hear you, Swan.
Great. Thanks for the time. First question is on going to next financial year. I think you talk a bit about brown spirits, what you're seeing currently is about low single digit. Can you talk a bit more about what you're seeing for white spirits, Thai beer, and Vietnam beer as well?
Hi. This is Sithichai Chaikriangkrai, Group CFO. Generally, we don't give much forward indicator, but I think the answer to the answer I was giving earlier because I think the question is relating to a softening of the brown spirits that we have experienced in the past year. So what we have seen in the current month, as we're expecting in the next few months, is probably a recovery of a single-digit growth in the brown spirits. That's as much as we are indicating. So we wouldn't give much indications on the other business as usual.
Okay. Got it. Can you touch a bit about the spirits, cost of goods sold, and especially raw material there?
Yeah. The cost of goods sold has been in Thailand. As I think some earlier call, we have discussed about our raw material has to do with molasses in the previous crop that was quite expensive. I would say I use the word expensive because it's much higher than in the previous year or many years. And so that's considered a peak for us.
And we have now started to experience much lower or acquiring molasses for the new crop at much, much lower price. And this is the crop that we'll start harvesting in December of this year, which is next month. So that we can indicate that our molasses acquisition for this new crop are much lower in assurance of over 10%-20%, much lower than a year before.
Okay. Got it. Thank you. I will jump back to the queue.
Thank you. Our next question comes from the line of Thitithep Nophaket from Kiatnakin Phatra Financial Group. Your line is open. Please go ahead.
Hi. Hi. Thank you. I have two questions. The first one, the Thai government distributed a 10,000 THB cash handout towards the end of September. Do you think that would overall boost consumption and then the consumption for the beverage, that beer and spirits? And the second one, my understanding is that the Thai Parliament has passed the law that would make it easier for people to obtain the license to operate distiller and brewers, but they only passed in the first meeting. When do you expect the law to be passed and may have your view on the potential implications? Thank you.
This is Sithichai. The first THB 10,000, yeah, we really benefit from that because it's cash. The next THB 10,000, if it is cash, it will benefit our business. But if they use digital wallet, I suspect that it will be difficult because they will have a lot of rules and regulations on what to spend, what products you can spend and all. So the next one, I think, is for the 60-year-old people. I'm not sure because they are too old to be a drinker. It's not like the last THB 10,000.
Right. Thank you, Sithichai. May I have a follow-up question on that? From my calculation, if I calculate correctly, your fourth-quarter sales of spirit and beer grew quite strong. Do you think it has anything to do with the cash handout? But you said the cash handout doesn't come until toward the end of the quarter, right? Or is there any other factor that drives the fourth-quarter sales?
I think it's started coming back, the consumption of both beer and spirit, especially beer, Kuntit Thap, because beer has a full benefit from tourists. Brown spirit doesn't get that benefit because the tourists, they don't drink brown spirit in Thailand. When they're coming in, they drink beer mostly. That's why beer is doing very well. But overall, it's getting better in the last quarter. And then for these two months, we can see the same trend. I hope it will be even better next year if people have more money. I mean, the government is probably trying to do a lot of measures to increase money in the pocket. So we should benefit from that.
Right. Okay.
Thank you.
Kosit, this is Sithichai Chaikriangkrai. I think the questions earlier also, your second question is about the draft law or change of law and regulations about licensing a new license. I think, well, first of all, we believe the current law itself is quite relaxed. It's opened up for a wide variety of producers or small producers. In fact, for spirit producers, the small producers have over 1,000 producers already in place.
So I think the current law, as is, we think, is probably operable for a small producer to introduce new products and grow to become bigger. However, there are draft laws that it is true that the three draft laws that went into the Parliament and one was rejected and two were accepted in the first round.
At the moment, we understand that the subcommittee is continuing to have a long debate over what to be coming out in the second round for the Parliament to vote. So at the moment, still have no indications of when it will come out. But we do expect further relaxations of regulations or make it easier. But I think this is a debate between regulations and public health and standard qualities of products that will be easily made, but at the same time, have to be of high quality. So that's something we understand is still under debate.
Okay. Thank you very much.
Thank you. Our next question comes from the line of Paul Chew from Phillip Securities. Your line is open. Please go ahead.
Yeah. Thanks so much for the presentation. Just three mainly housekeeping items. In your accounts, at least on the SGX filing, there's this item called former shareholders before business restructuring. Just wanted to understand the nature of this item and whether would this also be reflected in your FY26 results. That's my first question. The second question is just regarding your non-alcoholic beverage on slide 16. Just wondering, there was a difference between the net profit and the attributable profit to shareholders. So I just want to understand the minority interest. Was there some change because this is the first time you're revealing the full year's NAB numbers? My last question would be maybe just on the Myanmar exchange rate that you're using. Are you using the official rate or are you using the black market rates? Yeah. Thanks.
Okay. Hi, Paul. Kosit Suksingha speaking from Thai Beverage. Maybe I rang out there one by one. The first one you asked about the former shareholder profit owner, right? I think this one, based on the accounting standard, actually, they try to separate the owner of the share. Even we are on the common control by the same shareholders, but it's different of the group of company.
Then they try to break that the share that actually Thai Beverage owning for the F&N side in the past, 28%. Then we additional acquire for 41%. They will try to mention that this is a part of the consolidation group based on accounting standard, but used to belong to the former shareholder. That means that next year, I mean, 2025 fiscal year, this one will reflect it to the Thai Beverage book.
This is going to be the meaning of the former shareholder in the sense. Second one is about you asking about why the net profit of the NAB when translated to be attributable profit to shareholder, why it's going sacrificed to the minority. Actually, the consolidation basis after the share swap, we include the F&N as a total. But actually, when we look at the effective shareholding from Thai Beverage to F&N, which is about 69.6%, then F&N will take shareholders to the F&N holding burden, another 55%.
That means that actually some of the profit that we take out from the F&N side in this part for attributable to shareholder, just solely the matter that we own is not counted at the end non-controlling interest of the F&N. That is the second question. The third question is about the exchange rate in Myanmar.
According to the IFRS or the Thai FRS Interim Accounting Standard, right now, when we consult with auditors, the forward market rate in Myanmar is still uncertain, which the accounting standard cannot allow to use it. We actually use the official rate that were announced by the government and some of the international deals will use the reference at the same rate to book as account. I hope that clears your question?
Oh, yeah. Thanks so much for the explanation. Can I just want to again confirm? So these former shareholders before restructuring, that THB 4.7 billion, I think, is that part of your earnings per share computation? And so you're saying that in financial year 2025, this line item will be considered as part of your earnings per share computation. Sorry, I just wanted to clarify. Thank you.
Thanks, Paul. Let me clarify again. In terms of earnings per share, we actually based on what they call in accounting standard, they call basic earnings per share. Actually, we will not count as a former shareholder. But we already disclosed in the note to financial on the number 32 on the earnings per share that assume that when we announce the shareholder that we acquire after restructuring, if include the 41% of F&N profit into the EPS,
we will have a pro forma that we will calculate the EPS, including the after restructuring to comparison when we announce the share swap. But the basic you can see in the note that actually we have both include and not include the percentage of the additional shareholder that we have. But this shareholder will reflect in fiscal year 2025.
Hi, Paul. For more information, you can look at page 119 and 120 of our note to financial statement. That one will explain more in details for EPS.
Sorry? In your circular, you mean?
For the financial statement, page 119 and 120, under note 32.
Oh, okay. Okay.
Yep.
Okay. That's not the exact one, right? That's the other.
Yes, that part of our announcement tonight.
Okay. Okay. Sure. Thanks for taking my questions.
Thank you. So, ladies and gentlemen, there are currently no questions. If you would like to ask a question, please press star 11 on the telephone keypad now. Once again, if you would like to ask a question, please press star 11 on your telephone keypad now. Our next question comes from the line of Divya Gangahar from Morgan Stanley. Your line is open. Please go ahead.
few questions from me. The first one is just if you can help us understand the drivers of the higher spirits volume growth in the fourth quarter. And you did comment that on brown spirits, you expect it to improve, but just wanted to see if you've already seen that improvement in the September quarter that's helped the overall numbers.
The second question is on the beer volume growth. Could you help us understand the difference between the domestic beer volume as well as Vietnam? And if you can give any color on how that's been trending in October and November. And then the last question is just on the overall spirits margins. Just wanted to understand the decline in margins year on year. Even though this is a low quarter, what's really driven that besides the higher molasses, which was already baked into the previous quarters? Is there anything else that's driving the lower margins? Thank you.
Divya, this is Sithichai Chaikriangkrai. I'll address the spirit market, and then later on, we will have Khun Songwit run the Thailand beer and Khun Lester run the Vietnam beer business to help give you some highlights on the business. The drivers in terms of that, the white spirit consumption or white spirit sale for us is quite consistent, as you know.
We have a large scale of white spirit base, and that continued to be stable. I would just use the word be stable. It's been consistent with last year. The brown spirit, however, we have experienced some decline earlier in the year, and the fourth quarter, brown spirit sales start to, from year on year, start to stabilize, so I think it has adjusted down to a lower base, and therefore, we have seen that been back to the base.
Like mentioned just earlier in the other earlier questions, we have seen October, November improve in brown spirits sales. So that we are expecting that going forward in the next few months. So I think as far as we can see in the next few months, we think that's continued to be improved based on a lower base that we experienced from last year. That's from the Brown Spirits in Thailand. Okay.
Hi, Divya. This is Songwit from Beer Thailand. So the questions from you is first, what are the drivers that drive the top revenue in the Q4? So I would say that there are some they are both from the external and internal factors. From the external factors, for sure, for Thailand, we see the recovery of the tourists that are still, I mean, that are already coming to Thailand.
The level for the tourist number right now is almost the same as the pre-COVID-19 level. Second one, we know that you may know that we have a new government. So they try to reboot the economy. So some kind of the positive atmosphere. The last one, for the key strategic platform for the Chang in Thailand, we have one of that is the football. If you remember for the Q4, we gain some benefit from the football euro that are coming during June and July. Also some support from the Olympic Games that we have in July and August. So our team, we try to capture that opportunities. The second question, what the outlook for first quarter? We still see the positive trend on this. That's all.
Hi, Divya. Lester here. Just talking about Beer Vietnam, for us, I think you would have seen the numbers from last year where we had almost 12 consecutive months of decline for the total overall market. Obviously, the market has picked up since June quarter. So June, July, August, we've seen some recovery in the beer market. And so it's looking good that the market is growing again. It's down to a few things.
One, obviously, is the government spending into infrastructure projects. Although we see that more in the north of Vietnam, that government spending is heavy there. And as well as new FDI money coming into the country. So with the market just on the cusp of new recovery, we actually are quite positive about 2025, especially our position now where we have become number one for six consecutive months in a row. Things are looking good for both the beer industry as well as the BeerCo's role within the beer industry. Thank you.
Sorry, I think Divya, my colleague, reminded me we'll have an answer to you on the cost of goods or the gross profit margin for the spirit. That's contributed from a change in product mix as we just have a smaller percentage of brown spirit in the mix. So that's made the gross profit margins slightly down.
Got it. Can I just follow up on the market share comments for Thailand as well? Compared to overall industry, have you guys grown? And is the market share now above 40%?
Yes. For the market share in Thailand, I would say that we still are seeing Chang going up. But overall for the company, you would say that they're still in the range of the 40%.
So the overall industry growth itself has been positive, and we've grown in line with the industry this quarter?
How would you say? We are a little bit stronger than the market.
Got it. And can you also comment on just the beer margins for the domestic business? I can understand for Vietnam, it was mentioned that the high-cost inventory would extinguish by March, so that would improve margins. How about for the domestic beer business?
As you can see from the last year, FY 2024 compared to FY 2023, that the gross margin performed better. Let me back that down. Okay. But overall, we performed better due to lower raw material and also better efficiency for the production and supply chain. And we continue to see that trend.
Got it. Thank you very much.
Thank you. Our next question comes from the line of Andy Sim from DBS. Your line is open. Please go ahead.
Can you hear me? Hello. Hello.
Hi. Hi, Andy. We can hear you.
Yeah, sorry. Okay. Yeah, just a follow-up question from earlier on the market share and competition. Can you get more color in terms of the Thailand beer market? In terms of, I understand that you are growing slightly stronger than competition. How is it trending versus the two, I mean, the last? Is it trending better against the larger competitor or the new entrant? And how do you see yourself comparing against these two? That's my first question, more specifically on the Thailand beer market.
And the second question is actually more maybe housekeeping. Maybe just want to understand in terms of I noticed that the tax has actually gone up a fair bit. Maybe I haven't had a chance to go through the detailed financials, but I just want to understand what is actually the reason for the increase, higher tax, local tax itself.
So, Andy, thank you for the question. Normally, we don't disclose the number, but we would say that we are strong right now.
Hi, Andy. Kosit Suksingha here. I think for the corporate total tax this year, we'll have some of the few points that we have some changes from last year. Some of the increasing is included from the spirit and some of the both spirit beer and non-alcohol beverage. Because for spirit, actually, some of the profit that we generated, it came from some of the Myanmar profit growing. Actually, that one we also keep paying high tax on that one.
For the beer one, as you see that actually, especially on the beer profit growing for some part of Thailand. So we have some higher profit based on the profit increase this year. So tax increase accordingly. For NAB, actually, year on year growing, some of the major parts, some of the BU, we have some certain incentive of the tax period expires this year. So some of the tax will be back to normal. That will be the critical key point that turning the tax higher than last year.
So can I just confirm? So this will be roughly the effective tax that roughly we can expect going forward, given the expiry of some tax benefits that I mean, you say that the tax benefit has expired.
Andy is just probably gone. So I think the number for us to release this period, it's a bit difficult to compare last year because when we consolidate F&N into the book, yeah, that number, when you compare, then you start to look like we're paying more tax. But I think in general, F&N has its own profit and loss, and that tax is blending into what we have.
And right now, because we are based on the number you see, we actually do operate in Thailand, in Vietnam, then we're followed by Malaysia, Singapore, Myanmar. So it's a blend of many jurisdictions inside. But generally, like what Kosit mentioned, some of the businesses have come out from the BOI or tax-free in Thailand, and then that made their effective tax rate have gone up. But that's in the non-alcoholic beverage side of the business. Because for the alcoholic beverage, those businesses do not have tax incentive.
Okay. So what we can do is actually take what F&N was reporting and also what and roughly we'll get a sense. So essentially, there are actually not much changes. It's just more of the business combination that actually what we can see here. Is that the right way to look at it?
Yeah. Yeah. I think that's correct. In terms of taxes, there's no changes, significant changes in our tax or tax planning or strategies. We're just operating as normal. But because the business are quite complex in many jurisdictions, but because I think a lot of these are coming from when we add F&N into the NAB business, that see the compositions of tax being higher just because that's what it looked like in the F&N as a company.
All right. Okay. Thank you. Thanks a lot.
Our next question comes from line of Lathan Tan from UOB. Your line is open. Please go ahead.
For us, just previously. So yeah, no more questions. Sorry. Thanks.
Thank you. Our next question comes from the line of Xuan Tan from Goldman Sachs. Please go ahead.
Hello. Hi, Xuan.
Xuan, sorry, Xuan has gone back to the participants' poll. Shall we open the next one? Our next question comes from the line of Thitithep Nophaket from Kiatnakin Phatra Financial Group. Please go ahead.
I just want to confirm that I understand the new accounting practice correctly. Because right now, you consolidate F&N, right? So if I look at the revenue, cost of goods sold, and SG&A, you consolidate F&N from the beginning of the period, but then the actual restructuring didn't happen until September. So you made adjustment in the line that's called former shareholder before business restructuring. Is that accurate?
Correct, Kunsong. At the console level, we include all, but we're breaking the line for the ownership, breaking the line.
Okay. That's very clear. Thank you very much. Thank you.
Thank you, so ladies and gentlemen, once again, if you would like to ask a question, please press star 11 on the telephone keypad. Once again, as a reminder, if you'd like to ask a question, please press star 11 on your telephone keypad. Our next question comes from the line of Selviana Awing from HSBC. Please go ahead.
Thanks for the opportunity. Probably it's a question for Khun Song specifically. I guess one of your key competitors in Vietnam are rightly saying that they are actually looking at reinvesting a little bit more into advertising and brand building. How are you thinking about the state of competition going into the next year? What are you doing to basically counter some of these competitive challenges as well as maintain what is the number one position for you guys right now? Thank you.
Hi, Selviana. No, I think competition overall has always been quite intense. All the major international players are in the market and spending quite a lot of money. So all of us do invest heavily behind our brands, and it's no different for us. So we do the full range of marketing activities, both above the line as well as below the line. It is an open market. It's not a dark market like many of the other alcoholic industries in other countries in Asia. So it is a light market, and we continue to invest heavily behind our brands. I don't know if you read the news yesterday. We just launched a new R&D center in our brewery.
So it's not only is it a matter of advertising, but also being at the head of the curve in terms of launching new products that cater to the needs of the market. So earlier this year, we launched the new brand. It's a lighter beer that caters to the changing tastes of the new drinkers in the market. So we will continue to do such things as we move forward, spending correctly, but at the same time meeting the needs of the consumers.
Thank you.
Thank you. There are currently no questions. So ladies and gentlemen, if you would like to ask a question, please press star 11 on your telephone keypad. Our next question comes from the line of Xuan Tan from Goldman Sachs. Please go ahead.
I have a question on Vietnam beer. I guess earlier when consumption was weak, the beer actually benefited from downtrading. So with the improvement in consumption, how are you thinking about a reversal of that and back into premiumization? And in terms of how you're planning your marketing dollars, is there anything that you will do differently?
I think that's a very good question. Yes, you're correct. In the last couple of years, 2023 especially, there was quite heavy downtrading from the highs of 2022. What we saw last year was a gradual moving up along the premiumness index.
So what we did earlier this year, like I mentioned, we launched a new beer, which is in the mass premium space. So as drinkers move up the margin ladder, we have brands there that capture that demand and capture that space as well. So moving forward, again, we have a finger on the pulse of the market. So as we see what the consumers are, the way the consumers are moving, we adjust accordingly, not just with our marketing activities, but also with our portfolio.
So yesterday, when we launched our R&D center, we have quite a few recipes that are ready on hand to launch in the market. As and when consumer demand is there, we are ready to fulfill all the needs of the market.
Thank you. And would you be able to share what's the third-quarter market share trend?
Third-quarter market share trend. Sorry, third quarter as in which months are you talking?
The June to September or July to September.
July to September, we continued to grow. So the gap widened between ourselves and our competitor. So at the end of September, we recorded the six-month envelope of being number one in the market, and the share gap opened up further in September. I think there are some. I know there are some investment houses who also subscribe to AC Nielsen. All our numbers are AC Nielsen numbers. It's just that we cannot report. I mean, our agreement doesn't allow us to report the numbers.
Got it. By number one, you're talking about volume, right?
Yes, by volume, correct.
Volume, by beer brand.
Correct, so we are the number one beer brand. We have the number one beer brand in Vietnam, and as a company, we're also number one when you put all the brands together.
Okay. Got it. That's very helpful. Thank you.
Thank you.
Our next question comes from line of Lathan Tan from UOB. Your line is open. Please go ahead.
This one, quick question. How are we looking at ASP hikes? So given that demand is about to, is there any potential for any ASP hikes across any of the SKU, either beer or spirits?
Lathan, can you explain your question again? We couldn't catch what you're talking about.
Oh, yeah. Yeah. So given that demand has started to pick up or the outlook has improved, how are we looking at potential ASP hikes, like raising prices? So do you see any potential to raise prices for either the beer or the spirit segment?
In terms of the price increase, this one, we are careful, and we don't give a forward outlook for the price increase.
Okay. Okay. No worries. Thank you.
Thank you. Our next question comes from the line of Bernice Chu from UBS. Your line is open. Please go ahead.
Hi. Thanks for the question. I just have a question on NAB. So could you explain a little bit on your aspirations for the segment? I think there was an article that commented that you expect a double-digit growth or payback for the investment in aggregate. So just wanted more color on that. Hello.
Hi. This is Kosit. I think regarding your questions on, I think, the outcome after the share swaps, right? I think, as you can see, that we still, I think, possess a lot of brands that are number one in every market, right? So I think we will continue to be the leader in that particular market, right? As for others, I think, heads up on our aspirations. I think that's what Kunsong just mentioned. We normally don't give that forward-looking statement, right? Thank you.
Thank you.
Our next question comes from the line of Xuan Tan from Goldman Sachs. Please go ahead.
Two more questions from my end. Interest expense up 10% year on year. Can you talk a bit about what's your average cost of debt now? And if you look at next year's refinancing versus current spot, has interest expense peaked?
Okay. This is Prapakon. The answer is, have our net effective interest rate peaked? The answer is no, because I think, well, a long explanation to that was we do actually run fixed and float debt portfolio, and most of our debt are fixed. And in this past year, our blended interest cost, just from the ThaiBev perspective, not F&N, because we just consolidate F&N across, have inched up by about 50 basis points. But we believe that it could go up by a bit more because as our fixed rate bond mature and we refix with the new rate.
However, we don't expect it to jump that much anymore. It's very close. I think within this year, it should probably inched up a bit, but it will have peaked already. And as the trend globally, the interest rate already started coming down. So I think we don't expect our net effective interest rate to go up much higher. I hope that works.
Yeah, that's clear. Second question is on the restatement. So if I look at both FY24 and FY23, that consolidates F&N assuming on a 100% basis and then less out the minority. Is that right?
Hi. Hi, Sean Kisdah speaking. I think the total consolidation of the F&N, when you look at the 2024 and 2023, actually we include all of the debt together as a total.
Okay. So what was left in the associate JV is just Vinamilk mostly. Is that it?
The major one of the associates will be the Vinamilk. It's a part of the F&N where we consolidate, and we have some small associates in Thailand, just a small one.
Okay. Same to assume majority Vinamilk.
Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star 11 on your telephone keypad. As there are no further questions, we're now beginning a closing comment. Please go ahead, Ms. Namfon Aungsutornrungsi.
Thank you for joining ThaiBev's conference call tonight. Again, if you have any more questions, please feel free to contact IR department at ir@thaibev.com. Thank you and have a good night.
This concludes today's conference call. Thank you for your participation. You may now disconnect.