Saigon Petroleum Services JSC, which lost its biggest customer Heineken in 2016, has reported falling revenues for the 3rd straight year.
SPSC generated around VND46 billion ($1.96 million) in revenue last year, down over 16 percent from VND55 billion ($2.35 million) the previous year. The company’s revenue had dropped nearly four times compared to 2015, when it was still providing promotion personnel to Heineken.
Heineken Vietnam terminated its personnel supply contract with SPSC in mid-2016 to implement its parent company’s new global recruitment policy. Photo by Reuters/Eric Gaillard.
However, there has not been much change in profit after tax for the company in this period. The company recorded around VND7 billion ($298,900) in after-tax profits in 2018. This figure has been consistently hovering in the VND 6-8 billion ($256,200 – $341,600) range since 2013.
Although its main registered business is the provision of beer marketing services, SPSC has reported no revenue from this activity. It now deals in leasing real estate and tourism services, which made up roughly half of the company’s revenue each in 2018.
Profit from these segments, mainly from fees for undertaking legal procedures and making capital contributions in joint real estate development contracts with partners, has allowed SPSC to consistently earn profits over the years.
Four years ago, Saigon Petroleum Services JSC was one of theVietnam’s leading providers of beer marketing services. The company had more than 2,000 employees; and continuously growing sales that peaked at over VND200 billion ($8.54 million) in 2015.
However, Heineken Vietnam, SPSC’s main customer, terminated its personnel supply contract with the company in mid-2016 to implement its parent company’s new global recruitment policy.
SPSC immediately fell into a crisis. The company had to cut down its staff, and has less than 40 people left at the end of 2018.
Heineken had a 25 percent share of the Vietnamese beer market at the end of 2018, second only to Sabeco, Vietnam’s biggest brewer, who had 43 percent, figures from the Vietnam Association of Liquor, Beer and Beverage and securities firm Viet Capital Securities showed.
Despite Vietnam’s promising beer market continuing to grow by a stable 5 percent a year, SPSC shows no indication that the company plans to re-develop its former business and look for other clients.
Instead, the company plans to focus on developing apartments and office leasing, travel and other services, and will add additional services in overseas study consultation and selling airline tickets. It has set a revenue target of VND68 billion ($2.9 million) and after-tax profit of VND10 billion ($460,980) this year.