According to business results published by KIDO, its net revenue in the third quarter this year was nearly $83 million, down $8,6 million compared to the same period last year.
The company's after-tax profit was only $1.7 million, declining up to 58 per cent year over year.
After three quarters, KIDO has just met nearly half of its annual revenue target. KIDO's downward status comes from the decline of its ice cream and yogurt. After selling the confectionery area to Mondelez International, the frozen products became one of the key parts of the company, in addition to cooking oil products.
In the third quarter of this year, KIDO frozen foods joint stock company, a subsidiary of KIDO Group, posted a revenue of over $15 million, down 20 per cent year over year. The company only achieved a profit of less than VND1 billion (roughly $44,000) while the figure of the same period last year was VND70 billion (roughly $3 million).
Kido Foods' sales are down due to slower demand for ice cream and increased competition.
Ice cream products have contributed about 80 per cent of Kido Foods' sales but the market now is quite narrow with a lot of competitors including many foreign companies. In the first six months of 2018, the company's ice cream revenue grew only one per cent thank to high-end segment while the mass segment faced strong competition.
Kido Foods's products have to go into competition with rivals such as Unilever or brands from Korea and Japan. In addition, ice cream products meet difficulties when there are new trends such as bubble tea, jelly.
A new segment of the company which is processed food does not contribute to the overall performance. This sector was formed after KIDO Group has cooperated with Dabaco Food to provide pangasius, ham and pate.
However, the launch of Kido Foods' new products has been delayed because the company is in the process of reorganizing the sales and improving production efficiency.
KIDO Group's other business segment, KIDO Oil, reported a sharply decreased profit. Tuong An Cooking Oil Company gained a profit of $2.4 million after first nine months of 2018, down up to 36 per cent. Tuong An is now moving from low-value and low-cost products into high-end products to improve profitability.
Another KIDO Group's cooking oil brand, Vocarimex, also dropped sales and gross profit in the third quarter due to the impact of oil prices.
While the business results are not positive, KIDO Group still maintains a large amount of bank deposits which is nearly $86 million, helping the company to collect about $1.9 million in interest.
Thanks to the deposit and loan interests, KIDO Group is able to record a pretax profit of $1.7 million in the third quarter and $3.7 million after the first nine months of this year.