Thai Beverage Public Company Limited (OTCPK:TBVPF) Q4 2022 Earnings Conference Call November 25, 2022 6:30 AM ET
Company Participants
Namfon Aungsutornrungsi – Head, IR
Prapakon Thongtheppairot – EVP Chief Spirit Product Group, CFO, International Business
Lester Tan Teck Chuan – Chief Beer Business, Thailand
Bennett Neo Gim Siong – Chief Beer Business, Vietnam
Conference Call Participants
Horng Han Low – CLSA Limited
Permada Darmono – UBS
Divya Gangahar Kothiyal – Morgan Stanley
Llelleythan Tan – UOB Kay Hian
Ong Khang Chuen – CGS-CIMB
Selviana Aripin – HSBC
Operator
Good evening, everyone, and thank you for joining the Thai Beverage FY 2022 Results Call. All participants have been placed in a listen-only mode. Later, we will 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, ThaiBev’s Head of Investor Relations; and the members of ThaiBev’s senior management team. Thank you. Please go ahead.
Namfon Aungsutornrungsi
Good evening, ladies and gentlemen. Welcome to ThaiBev’s fiscal year 2022 ended 30th of September 2022 financial results conference call. I am Namfon Aungsutornrungsi, Head of Investor Relations. For the conference call tonight, I will start with a summary of the full year results, then we will open the line for a Q&A session with our management team here.
For the summary of the full year results, total sales revenue of the company for the year ended 30th September 2022 was Baht 272,359 million, an increase of 13.2% when compared to last year. This was due to an increase in sales revenue of our business segment.
Net profit was Baht 34,505 million, an increase of 26.2% year-on-year. This was due to an increase in net profit of beer business, non-alcoholic beverages business, food business and associated companies, although there was a slight decrease in net profit of spirits business.
The Board of Directors has proposed to issue a dividend of Baht 15,072 million or Baht 0.6 per share, which is higher than Baht 0.5 per share of last year. The payout ratio for 2022 dividend is 50.1% payout ratio. Please note that the interim dividend was paid in June 2022 at Baht 0.15 per share, and the final dividend will be Baht 0.45 per share.
In 2022, the company’s spirits business generated sales revenue of Baht 116,177 million, a 1% increase year-on-year while total sales volume increased 0.1% year-on-year. The spirits business reported net profit of Baht 21,902 million, a decrease of 1.1% year-on-year due to change in product mix and higher packaging costs, although molasses costs started to come down in the third quarter 2022. To mitigate the impact, the company made appropriate price adjustments.
The company’s beer business recorded sales revenue of Baht 122,489 million in 2022, a 23.5% increase compared to the previous year, in view of higher beer sales volume following the relaxation of COVID-19 control measures in Thailand and Vietnam. Total sales volume increased 14.5% year-on-year when including SABECO’s sales and increased 3.7% year-on-year when excluding SABECO’s sales. Net profit showed a satisfactory increase of 143.6% year-on-year to Baht 7,597 million.
The company’s non-alcoholic beverage business generated sales revenue of Baht 17,432 billion, up 14.6% year-on-year. Total sales volume increased 10.9% year-on-year mainly driven by higher demand for our drinking water, carbonated soft drink and ready-to-drink tea products. Although there was an increase in materials cost, the non-alcohol beverage business reported net profit amounting to Baht 586 million, increased 27.8% year-on-year, mainly due to the improvement of production efficiency and the cost saving initiatives.
The company’s food business recorded sales revenue of Baht 16,433 million in 2022, a 45.7% increase year-on-year, following the resumption of dine-in services. Net profit increased significantly by 177.1% year-on-year to Baht 376 million. This was mainly due to an increase in sales as well as the prudent management of distribution costs and administrative expenses.
The company’s international business recorded sales revenue of Baht 78,872 million in 2022, a 37% increase year-on-year. The increase was mainly due to a 46% increase in beer sales revenue from SABECO in line with Vietnam’s strong reopening momentum. Sales revenue was further boosted by a 7% increase in revenue generated by the international spirits sales on the back of higher contribution from Grand Royal Group in Myanmar as well as from the Scotch whiskey sales and the sale of Chinese spirits.
That is the summary of our full year 2022 financial results. Now we will open the line for any questions on our results. Operator, please help open the line for our Q&A.
Question-and-Answer Session
Operator
[Operator Instructions] Our first question is from Horng Han, CLSA.
Horng Han Low
The first question I…
Namfon Aungsutornrungsi
Hello, Horng Han, can you please speak out a little bit? Hello?
Horng Han Low
Sure, sure. Can you hear me clearly?
Namfon Aungsutornrungsi
Can you speak a little bit louder?
Horng Han Low
Is it okay now? Is it louder?
Namfon Aungsutornrungsi
Okay. It’s much better.
Horng Han Low
Hello. Can you hear me?
Namfon Aungsutornrungsi
Yes, it’s good now.
Horng Han Low
Sorry about it. Thank you for the patience. The first question I have is on pricing. Can we try to understand this year how many times has Chang Beer raised prices? I understand there was a price increase in the first quarter, sometime in March. Has there been any price increase subsequently after that? And will management be planning any in FY ’23?
Unidentified Company Representative
Yes. Okay. Horng Han, yes, we did a price increase across the entire portfolio of brands and all SKUs in the first quarter of this calendar year. We haven’t — we — for the rest of the financial year, we did not make another price increase, although there are plans in the works for another one within the financial year.
Horng Han Low
Sure. Sorry, maybe I didn’t hear you clearly, sir. You mentioned that next financial year, FY ’23, you may have some plans to raise prices again, right?
Unidentified Company Representative
Yes. Correct. Because these are forward-looking statements, so I cannot give you a clear definition. But yes, it’s within the plan for this financial year that we will do another price increase.
Horng Han Low
Okay, sure. I understand. And the second question I have is on the inventory. With regards to the beer business, can we try to understand in terms of the procurement for your raw materials? How much has it changed compared to a year ago when you were buying let’s say in December, November in 2021 versus now in November, December 2022. Can you give us some sense in terms of the increase?
Namfon Aungsutornrungsi
Horng Han, you talk about the raw material for the beer?
Horng Han Low
Yes, that’s right. That’s right. With regards to the malt bottle.
Unidentified Company Representative
Don’t worry, we have already secured our malt for — I mean, through the end of this year production at a lower price than market and also for the next half year — next year, we have already secured our malt price. I think, it will be higher than this year…
Horng Han Low
Okay. So because I think your…
Unidentified Company Representative
It will be higher than this year but it’s still significantly lower than the market price now, which is above EUR 800 a tonne. But we have secured. Yes. Okay. Please go ahead, ask me.
Horng Han Low
Okay. Sorry, I think your voice was breaking out a little bit. I think what I hear is that the price that you are buying now is higher than last year, but it’s a lot lower than market price. Am I correct?
Unidentified Company Representative
Yes, you are correct. But we have already booked for the next half year. The price of next half year will be higher than average of this year but still lower than the market price. We are so lucky that we have booked it ahead of the game.
Horng Han Low
Okay. Okay. And is — can we try to understand how much lower is the competitive prices? Is it like a 5% lower or is it like 10%, 15% lower than market price compared to the industry peers?
Unidentified Company Representative
Higher than that, higher than 5% for sure. Much more than 5%. You will be surprised. But the — people tell me because otherwise, for the average cost of this year, extremely lower than the market price. Next year will be higher than this year, but still cheaper than the market price because we move ahead of the game. And the inventory will be at least…
Horng Han Low
And the last question…
Unidentified Company Representative
Yes. Yes.
Horng Han Low
I was just trying to understand what’s the price difference between your buying, what you bought last year? Is it like 20%, 30% more? Is there some kind of guidance you can give, sir?
Namfon Aungsutornrungsi
Horng Han, I’m afraid this one is kind of forward-looking because if we tell you how much we — it’s more than you can guess the number, sorry about that.
Horng Han Low
No problem. It’s okay.
Operator
[Operator Instructions] We have got Permada Darmono from UBS.
Permada Darmono
Thanks for some of the inputs. Any comments on the outlook of molasses? And just how will you plan to tackle the packaging costs? I suspect the packaging cost has increased a lot as aluminum. Is that right?
Unidentified Company Representative
Prapakon, can you respond to that about molass, please?
Prapakon Thongtheppairot
Okay. On molasses, which is related more of the spirit in Thailand we use molasses that is input cost, packaging wide we use glass bottle. So aluminum can will probably be more related to the beer business in Vietnam because using a lot more aluminum can than the beer business in Thailand, which is mostly glass bottle. Okay.
On molasses wise, last crop as reported in previous meeting that price has been better than the year before, and we are now expecting a much higher sugarcane crop this year, should be expecting to retain which should start harvesting in middle of December, we are — based on the government forecast, it’s been that at least 15% to 20% upward in terms of output. So with that, it should allow for more molasses in the market. And that will allow us to acquire more molasses.
Pricing-wise, we see quite stable pricing due to recent baht weaknesses have caused some of molasses price to stay firm into export price. So that’s where we are. Relating baht, Thai baht has strengthening back. So when the crop start harvesting and the product is available to purchase, we are expecting that price will be softened. Then currently that’s where I am on molasses. On aluminum cans, I will let my colleague to answer.
Unidentified Company Representative
The alu can, the price comes down already, and we enjoy it also. That’s what I can say. The price of the alu can come down quite significantly from its peaks.
Permada Darmono
Got it. And just on domestic spirit, the sales volume growth seems quite apt this year, and I understand that’s because of the brown spirit as Thailand continues to reopen, tourists continues to come. I know spirits generally — or tourism doesn’t really benefit spirits too much. But as the economy reopens, how should we think about the spirits volume consumption? Will it recover further? And what’s the reason behind the relatively rapid increase for this fiscal year?
Unidentified Company Representative
Okay. In terms of brown spirit, we have started to see in our last quarter, July, August, September, the higher increase in consumption and even the latest number in October, and this is not our number, this is third-party, the big company, third-party market research that the — those — acquire those data. The consumption for brown spirit in Thailand has increased. I think last quarter, over 20% and the latest number in October, I’ve also seen the number at 20%, this is third-party data. So that’s in line with the level we are selling in. This is the baseline. Last year may be a bit low because of highlighted tail end of COVID with the social distancing and all that. So I think we’re looking very positive with the recovery of the brown spirit consumption.
Permada Darmono
And the reason in fiscal year 2022 of the relatively slow growth of spirit?
Unidentified Company Representative
In terms of profit-wise, actually Thailand representing about, say, 90%, 92% of those numbers. There’s some — the part about 8% coming from Myanmar. Myanmar wise, we are doing very well for higher volumes as well. In terms of Myanmar chart, everyone knows the currency has been weakened rapidly due to change in the political environment there. And — so with that, the profit that came in although actually our business in Myanmar made record profits in local currency. But in baht, when we translate back to our reporting currency, the profit declined. So that’s in line with that.
In terms of spirits Thailand last year is the cost structure, that cost of raw material and packaging that we have to deal with, we have some price increase, but not offsetting the overall increase in structuring cost — structure costs on the input. So that’s why we show slightly lower number.
Permada Darmono
Understood. But what about the top line? Because the top line grew only by 1%. So just wondering what’s the driver? Because back in FY ’21, I think, it was better, right?
Unidentified Company Representative
Yes. I think overall, I would say, blame on economy. I think we were quite large in terms of the volumes, and these are our number based out of what the economy would generate. And this past year, like again, the tail end of those COVID and the government’s income support and the general economy started to soften quite sharply. But again, toward the last quarter, we started to see a lot of better size in terms of recovery in spending by the consumer.
Permada Darmono
And last question from my side. Any views or any kind of indications of excise tax to increase?
Unidentified Company Representative
There’s no excise tax increase at the moment. It’s unlikely at this point. We have the new government according to the government term, the new election should be called by the full year parliament terms ending in March. So between now and then, there should be a new government. And therefore, quite any excise tax changes will probably be the policy of the new government.
Permada Darmono
Got it. And have a good evening, and of course, best of luck for the first quarter of the fiscal year ’23. Really appreciate it.
Operator
Our next question is from Divya Gangahar, Morgan Stanley.
Divya Gangahar Kothiyal
Two questions from me. The first question is just on the spirits margins. Can you help us understand why the spirit margins at the operating level are much weaker than what we saw in the first half of this year? So we are seeing about a 200 basis points lower margin in the second half versus the first half; and even versus last year, it’s down about 50 basis points. So while I understand the raw material side, the gross margins are actually still higher, but it’s the operating margin, which is lower. So I just wanted to understand what SG&A increases are you really seeing on the spirit side? That’s the first question.
And the second question is if you can comment on the law on the Progressive Liquor Law that’s been debated in Thailand now. Based on the bill that’s been passed the changes that you see, I mean, what do you expect — how do you expect that to impact the business?
Unidentified Company Representative
I’ll take the new law first. The new law actually passed by the government under Ministry, the law. So that allows for home brew. I mean, people can brew beer and drink at home, people can spirit — distill spirit and drink at home, brewed at home, personal consumptions, we do not — but they are not allowed to sell distilled spirit outside of their premises. And there are limit to how much they can actually produce for their own use for the month. So sorry for my voice I am having this bad cold, supposed to be going away.
So the — so with that law, the change in that law and some additional products, that the smaller — they call it village products have allowed — being allowed to increase the capacity. Those products, that goes to part of the home consumptions. And do you thing at home consumption, it’s not going to — we do not see as it’s going to change the landscape of the consumer because I think home consumption or home doing has always been there, whether regulate, not regulate, which is being regulated properly and people have to have a license to do that. And distilling your own spirit, it also comes with a lot of risk in terms of quality. So those are something that we do not support their thinking because it’s just — it’s too risky for the consumer, but we don’t see it’s going to change the landscape of the competition.
As for the additional clarity from the low-cost spirit, potentially will increase the competition of that low price spirit, that low price spirit has always been in a space where tax collection has not been effective. So I think it’s a question of the government trying to collect tax as the producer showing that to size their capacity increase, although the capacity probably always increase from the beginning, but they’re not quite regulated and support by law. So I think these two parts, the law actually been out there to regulate what had been reached of the law. So I don’t — we don’t see that as much changes to the way we deal with the business, because our product price — although product price, we call it low price, but the low price that didn’t stand out mass market. These products we are talking about in the capacity, priced much lower, and again, add lower quality.
Okay. Back to the gross margin, operating margin, can you ask me that question again because I wasn’t sure what you’re asking? I understand….
Divya Gangahar Kothiyal
Sure. So what I was saying is that in terms of the spirits margin, like I understand that at the gross profit level, the margins have actually been better on a year-on-year basis in the second half of this year. But what we’ve seen is that the SG&A spends have gone up quite a bit and — in the second half of this year. So if I look at the SG&A spend, it’s the reason why the operating margins are actually lower year-on-year. Trying to understand where the pressures have been on the SG&A spend? And are there any one-offs? Or do you expect these kind of margins to persist because the spirits margins are now below 21% in the second half?
Unidentified Company Representative
Yes. I think this is — we don’t break down into different countries, but I think most of it you see is in Thailand. The — what happened really on the product mix, we have a lot of price rate mix at the beginning of the year. So that from the volume perspective, it might be a help supporting that baseline when you calculate the margin back.
In second half, the price rate, volumes are much lower than the normal half because we did price increase in the first half, so a lot of volume is loaded upfront. And in the fourth quarter, as the brown spirit start to return with increasing growth, we also have to increase our spending at the — on the brown spirit. So that’s been increasing in every station of malt sale in Q1 and Q2. So I think with that mix, it’s probably — you see maybe a shift of margin erosion, but I think it just has to do with the mix of where we cut the first half and second half. I wouldn’t put much weight onto that change.
Divya Gangahar Kothiyal
Got it. But basically, marketing spend is what you’re seeing have been increased in the second half to support the brown spirits business as you have more on-trade come back?
Unidentified Company Representative
Yes. It is the current and — so that’s anticipating of the sale in the first quarter.
Divya Gangahar Kothiyal
And just my last question is on beer market share in the domestic side. Could you help us understand — like it seems to be that the volume growth in the second half has been 3%, 4%. How have your market shares trended in beer within Thailand?
Lester Tan Teck Chuan
Divya, hi, this is Lester here. Our market share has been climbing. In fact, by the end of September, the gap between our competitors and ourselves was the smallest in the last 13 years. So our share continues to grow. It’s been trending up since the market opened, in fact, even during the COVID period. So trending upwards, although we’re not #1 yet, but we’re getting there.
Divya Gangahar Kothiyal
Thanks, Lester. Any number, like I mean, is it 41%, 42% in numbers you can share?
Lester Tan Teck Chuan
I don’t think we are allowed to share the share numbers, but you’re close. What you say there, you’re close.
Divya Gangahar Kothiyal
Okay, got it. All right. Thank you very much.
Lester Tan Teck Chuan
Well, again, Lester here. And before we continue, I just wanted to go back to the question that Horng Han raised earlier about price increases. I mentioned that we had plans in the pipeline. Actually, we did a price increase in October already. It is public information. Therefore, I can share it with you. I thought that we’re not supposed to talk about FY ’23. But because it’s public information, we did do another round of price increases in October already.
Operator
[Operator Instructions] We have a question from Llelleythan Tan, UOB Kay Hian.
Llelleythan Tan
So just a clarification on this. So the price increase in October was for the Chang Beer operating in Thailand. But can I ask for — is that — was there any price increases for the — in Vietnam for the product launch in Vietnam?
Namfon Aungsutornrungsi
You talk about the price increase in Vietnam?
Llelleythan Tan
Yes, yes. Was there any?
Unidentified Company Representative
Is Bennett on the line?
Bennett Neo Gim Siong
Yes, I’m on the line.
Unidentified Company Representative
Yes. Bennett, could you please because this is your market, yes?
Bennett Neo Gim Siong
Yes. For Vietnam SABECO, we — this is also public knowledge. We have increased our price in October as well across most of the products.
Llelleythan Tan
Okay. I have no other questions.
Operator
We have a follow-up question from Divya, Morgan Stanley.
Divya Gangahar Kothiyal
Lester, on the October price hike, just was curious to know if you can share how much has the price been increased and if competition has followed in line? And what is the current price gap between Leo and Chang?
Lester Tan Teck Chuan
Divya, as usual, we’re not allowed to give you the number, but it was a different percentages across the different SKUs. But for now, it was a low single-digit increase, and the gap right now, we’re pretty close to Leo already. We still have a ways to go in terms of on a per carton basis, but we’re pretty close.
Divya Gangahar Kothiyal
Got it. And just an overall question on the outlook for next year. I mean, it’s an election year. Typically, there is a little bit more cash floating around. I mean, can you maybe comment on what you expect on overall consumption trends for next year for both spirits and beer for the domestic business for Thailand particularly?
Unidentified Company Representative
Divya, you referred to election in Thailand, Divya?
Divya Gangahar Kothiyal
Yes, and I’m just saying it’s an election year, so does that kind of play into the consumption outlook? Or you think it’s…
Unidentified Company Representative
Yes. I think Divya, you’ve been — follow us for the last 10 years, you know every time we have elections, I think business — our business is doing very good because it seemed to be a lot of drinking, a lot of free beer, free spirit. Yes, we expect it to have some good impact in Thailand. Both beers and spirits though, both beer and spirit.
Divya Gangahar Kothiyal
Okay. So you do expect spirits volumes to remount.
Lester Tan Teck Chuan
Divya, say it again? Okay. I think you’re happy now. Thank you.
Divya Gangahar Kothiyal
Sorry, sorry, I was on mute. No, I said so compared to this year, spirits was actually weak. You do expect a bounce back in volumes for next year given you’ll have the additional catalyst of the election?
Unidentified Company Representative
Yes, we hope so. I think we always expect for the best or better. It’s going to be good. It’s going to be good.
Operator
Our next question is from Ong Khang Chuen, CGS – CIMB
Ong Khang Chuen
I guess just now we touched on election. But I guess there’s a near-term event, FIFA World Cup. Can you comment a bit about the mood in Thailand right now since FIFA World Cup, I guess the timing is quite favourable? Are we seeing pretty strong sentiment? And how does it compare to the last round of World Cup?
Lester Tan Teck Chuan
Okay. Well, the World Cup has just only started. And unfortunately, I wasn’t in the beer business four years ago. So I can’t really — I don’t have a basis for comparison. But I was walking around in Chiang Mai over the weekend, watching all the preparations for the first game — sorry, the second day of games. And I can say that at least in the market in Chiang Mai and in Bangkok, you see that a lot of — there’s a lot of — not high, but a lot of energy surrounding the World Cup. So a lot of interest there. We also will be having viewing tents — the beer viewing tents around Bangkok and a couple of other cities to tap on this towards the end of the tournament where the bigger matches will be played.
So I can say for now that as the market reopens, we’re starting to see a new energy and World Cup is helping with that.
Bennett Neo Gim Siong
Let me add because — this year, there’s four games from 5:00 o’clock — I think 5:00 o’clock, 7:00 o’clock, 11:00 o’clock and then late night. This — the first three games is very good for drinking. So we have long, long drinking hours. I mean compared to last time, it’s not like this, but I have to remind you that we just come back from the COVID incident. So it’s right now, must be about 80% of the on-trade is open, but a lot of people during the game start from early evening until about midnight.
Ong Khang Chuen
So I guess, good that you increase the price of your beer before the World Cup. Can you confirm that the price hike is only for the beer? Have you adjusted the pricing on spirit side recently?
Unidentified Company Representative
Yes, by the way, we always go together in different timing. Yes, definitely, yes.
Ong Khang Chuen
Got it. Last one is more of a housekeeping question. I’m not sure — if you can break down the mix for your spirits business say, brown versus white in terms of revenue contribution. How is it like in third quarter and fourth quarter of this financial year? And how does that compare with pre-COVID levels?
Prapakon Thongtheppairot
We don’t disclose that. I mean, we have not — we’ve never been doing that in the past, so.
Ong Khang Chuen
Got it. So if you cannot share number wise, maybe some qualitative commentary would help.
Prapakon Thongtheppairot
No. No, we don’t. That’s the way this — the way we disclose is Thailand representing about 90%, 92%, and 8% coming out from Myanmar and then 1% to 2% coming out from other international market. That’s how we disclose the number.
Ong Khang Chuen
Got it. Thank you so much for all the questions. Yes, I’ll jump back in the queue.
Operator
[Operator Instructions] We have a follow-up question from Permada Darmono, UBS.
Permada Darmono
I just have two questions related to the beer business. The first one is to either Bennett or Alan. Alan is also on the line. There’s been a worry about the bond market in Vietnam and SABECO has some VND 20.6 trillion in terms of short-term financial investments. According to the notes, it’s all term deposits. I just want to confirm that you don’t have any exposure to the bond market in Vietnam?
Bennett Neo Gim Siong
I can take that. Yes. So a quick answer to that is they are all short-term deposits, fixed deposits with the bank. And these are our panel banks and have pretty good credit strength in the market.
Unidentified Company Representative
With high interest rates.
Permada Darmono
That’s encouraging to hear. And then the second question is in relation to the beer marketing spend plan in Thailand as the economy fully reopens as Thailand reopens. How should we think about marketing expenses going forward in fiscal year 2023? Should it be an increase on a year-on-year basis? What kind of sort of advertising to sales ratio that we should think about, particularly coming out of Thailand in terms of marketing spend?
Lester Tan Teck Chuan
This is Lester here. I think to compare year-on-year against last year would be an unfair comparison because it was COVID for the entire year. So definitely, marketing expenses will be going up. What we’ve seen in the last quarter, when the market opened in July, what we saw in the last quarter of the financial year was that our marketing expenses went up. But compared to 2019, the last — the year before COVID hit us, our spend on a baht per liter basis continues to be lower than 2019, and we intend to keep it that way moving forward.
Permada Darmono
That’s great color. Thank you so much, Lester. Much appreciated. Those are all my questions.
Operator
We’ve got a follow-up question from Llelleythan Tan, UOB Kay Hian.
Llelleythan Tan
Sorry, my question was going back. I couldn’t — I didn’t catch the question about the price increase for the spirit. So I’d just like to clarify one final clarification. Was there a price increase level? Was it hand-in-hand with beer? Sorry about that — to make you repeat the answer.
Unidentified Company Representative
Yes, several I said. That’s what I say. We do have a price increase plan — in fact, in October, we increased some of the SKU.
Operator
[Operator Instructions] We have a question from Selviana Aripin, HSBC Research.
Selviana Aripin
Sure. Thank you very much for the opportunity management, and thank you very much for the presentation. I have a follow-up question with regards to the earlier comments around advertising spend. And this question is probably directed to Lester as well as Bennett. How are you observing your competitors behaving in terms of their marketing spend? Are they — do you have the sense that they are spending less than they did in 2019 in Thailand and Vietnam as well? How — can you speak also about qualitatively how their behaviors have changed this time around versus, let’s say, in 2019?
Lester Tan Teck Chuan
Hi, Selviana. Lester here. I will start with Thailand, and then I’ll pass it on to Bennett after this. I think that because for Thailand, the market only reopened in July, so fairly recently only, we have not come back to the types of levels that we saw prior to COVID hitting us in 2019. So — but I’m saying that I’m seeing the trend starting to pick up. We start to see more and more activities in the market. We also have had some big events happening. So like the MotoGP, which is an international race coming to Thailand. You had the APEC meetings just last week as well. And then now you have the World Cup.
So we see more and more opportunities for marketing activities to take place. So therefore, the trend will be continuing to pick up. But in terms of have we reached 2019 levels yet? I don’t think we’ve reached that level yet. It may come during the financial year. But on our end, we’re looking to control it. So that — like I said, on a baht per liter basis, we continue to be lower than 2019.
Bennett Neo Gim Siong
Okay. So Vietnam, I think our main competitors have increased their spend, particularly so this year because last year, the Southern core businesses were locked down. And I think they are very strong in the South, so they lost quite a lot of volume last year. So they are trying to regain share this year, so they are spending a lot more.
And also, I think there are more brands now they have to — they have to take their marketing budget to spend over more brands. And I think that is going to be tough moving forward. But for us, I think we’ve been managing our spend, although absolutely increasing. But Lester has said, we’re trying to manage it on a unit basis to remain — or lower if we can over the coming years. But we expect the marketing activities to be very aggressive in the next months and years. But we will prevail, so we will be more efficient.
Operator
[Operator Instructions] There are currently no questions.
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