TKN’s 2Q21 Earnings Decline 75% amid Lower Sales Revenue in China

Taokaenoi Food & Marketing Public Company Limited (TKN) has announced its 2Q21 consolidated financial statement through the Stock Exchange of Thailand as follows;

TKN reported a net profit of 22.24 million baht in 2Q21, decreased 75% from a net profit of 88.92 million baht in 2Q20. The decline was mainly due to a decrease in revenue from sales, especially China, driven by ongoing shortage of containers in the second quarter and the efforts to re-strategize China operating model in order to increase flexibility for the company and allow more effective expansion in Traditional Trade, e-Commerce, and NPD deployment.

 

The company had revenue from sales in the second quarter of 783 million baht decreased by 22.6% compared to the same quarter of the previous year due to sales in international markets decreasing primarily in China as a result of distributor transition in Traditional Trade and e-Commerce.

However, the company generated sales from new beverage products, “Just Drink” pasteurized milk tea and latte flavored products launched at the end of 2020 and May 2021, respectively, which helped improve the domestic sales.

 

In the second quarter, the company had a gross profit of 184.7 million baht representing 23.6% of revenue from sales. The ratio of gross profits to sales revenue decreased by 3.8% compared to the same quarter of the previous year.

The decrease was mainly affected by the increasing unit production costs compared to the previous year against the declining production utilization rate due to international sales decrease, and the impact of COVID-19 which affected the business of Taokaenoi Restaurant and Franchise, and resulted in the declining gross margin.