Sappe PCL or SAPPE reported its first quarter operating results which reached a new high with net profit of 156.2 million baht (+83.7% Y-Y, +174.0% Q-Q) and total revenue of 1,142.7 million baht (+47.9% Y-Y, +27.6% Q-Q), thanks to an outstanding growth in the foreign markets. The strong performance has prompted the company to expand distribution channels into retail stores (Modern Trade) in Europe and speed up its production to accommodate high demand driven by a beverage market recovery. The company is also considering a plan to expand its production line which is expected to reach a conclusion later this year.
SAPPE Chief Executive Officer Ms. Piyajit Ruckariyapong said the operating performance in the first quarter hit an all-time high with total revenue of 1,142.7 million baht (+47.9% Y-Year, +27.6% Q-Q) and net profit of 156.2 million baht (+83.7% Y-Y, +174.0% Q-Q). This remarkable growth was mainly a result of the expansion of foreign markets with Europe enjoying a growth of 136%, Asia 77% and the Middle East 58%, particularly when the company was able to expand its customer bases into the modern trade in several key countries in Europe. This helped the products reach more customers. At the same time, the company saw a clear sign of recovery in consumption in Asia and the Middle East as the total orders in the regions significantly increased. The most popular products in the foreign markets are Mogu Mogu, fruit juice with coconut jelly, and Sappe Aloe Vera Drink, a refreshment with aloe vera pulps. SAPPE is projecting a continuing growth of its sales volume this year as the third and fourth quarters are normally the company’s seasonal sales. Thus, a strong growth in the foreign markets is expected all year round amid high freight costs.
Regarding the domestic market, due to the production capacity limitation to serve the foreign market expansion, the company has adjusted its work plan and allocated partial budget to invest in the foreign markets. Hence, SAPPE has not yet launched any product or organizing marketing events, or witnessed the domestic growth in this quarter. However, the company still has plans to gradually launch new products and do the Online to Offline Marketing (O2O) in both foreign and domestic markets, starting from the second quarter.
The SAPPE CEO added that the company still maintains its revenue target to grow by 15-20% this year from last year with the total revenue of 3,712.77 million baht. Additionally, the new product development (NPD) strategy has been adjusted by reducing the SKUs for domestic products and turning focus to the product development for the foreign markets in order to expand distribution channels in over 90 countries in years ahead.
“Our exporting market is inclined to grow strongly. We are not surprised that the current main markets of SAPPE like Asia and the Middle East grow very well, as we have been doing marketing for a long time and witnessed a positive tendency since late 2021. However, the fact that our products are able to reach retail stores in Europe’s main channel, grow leaps and bounds and receive repeated orders prove that our products receive an overwhelming response and even Europeans like them. We, therefore, believe that this is another milestone to lead a Thai brand to become a global brand with strength and sustainability in all continents,” Ms. Piyajit said.