Business management costs "erode" An Cuong Wood's profits

In 2024, An Cuong Wood Company recorded revenue growth, however, business management costs increased sharply, negatively affecting profits, especially in the fourth quarter of 2024.

In 2024, An Cuong Wood Company recorded revenue growth, however, business management costs increased sharply, negatively affecting profits, especially in the fourth quarter of 2024.

The consolidated financial report of An Cuong Wood Joint Stock Company (ACG) shows that in the fourth quarter of 2024, the company's net revenue reached VND 1,216 billion, an increase of 5.6% over the same period last year of VND 1,151 billion. Cost of goods sold increased by 3.3%, reaching VND 840.8 billion, improving gross profit margin.

Gross profit reached VND376 billion, up 11.2% compared to the fourth quarter of 2023 (VND338 billion). However, revenue from financial activities decreased sharply by 32.7%, reaching only VND33 billion compared to VND49 billion in the same period last year.

An Cuong Wood Company set aside VND115.5 billion to reserve for bad debts, accounting for more than 70% of business management costs.

Financial expenses increased slightly by 6.7% to VND8 billion, of which interest expenses decreased by 3.4% to VND5.7 billion. Selling expenses increased slightly by 3.1%, while business management expenses increased sharply by 217.7%, from VND51.5 billion to VND163.6 billion. Of which, the company set aside VND115.5 billion to make provisions for bad debts, accounting for more than 70% of business management expenses.

Increased costs have negatively affected profits, specifically, operating profits dropped sharply to only VND99 billion compared to VND194 billion in the same period, down 49%. Pre-tax profits decreased by 49.7% to VND98.9 billion. As a result, after-tax profits reached VND90 billion, down 44.4% compared to VND162 billion in the fourth quarter of 2023.

By the end of 2024, the company's net revenue will reach VND 3,981 billion, up 5.8% compared to 2023 (VND 3,762 billion). Cost of goods sold will reach VND 2,730 billion, up 3%, helping gross profit reach VND 1,251 billion, up 13% compared to the previous year (VND 1,107 billion).

Full-year financial revenue reached VND163 billion, up 3%, while financial expenses decreased sharply by 21%, to only VND36 billion, thanks to cutting interest expenses to VND27.5 billion (down 29% compared to VND38.8 billion in 2023).

Selling expenses and administrative expenses reached VND493.7 billion and VND310 billion, respectively. Notably, administrative expenses increased sharply by 80%, reducing business profits.

Specifically, operating profit in 2024 will reach VND574.9 billion, up 9% compared to 2023 (VND528.9 billion). Pre-tax profit will reach VND523.9 billion, down slightly by 1% compared to VND528.5 billion last year. After-tax profit will reach VND420 billion, up slightly by 2% compared to last year.

From the above business results, the Board of Directors of An Cuong Wood Company has unanimously approved the termination of operations of 1 branch from February 10, 2025 to reorganize the operating apparatus.

Specifically, the branch that was terminated is Branch 5 - An Cuong Wood Joint Stock Company in Binh Hung Hoa, Binh Tan, Ho Chi Minh City. The Board of Directors authorized the General Director to be responsible for paying debts (including tax obligations), resolving issues related to labor regimes and completing necessary procedures with competent state agencies.

In terms of ACG's assets, as of December 31, 2024, the company's total assets reached VND 5,639.8 billion, an increase of 2% compared to 2023 (VND 5,522 billion). Of which, cash and cash equivalents increased sharply by 73%, reaching VND 115.3 billion, showing more abundant liquidity.

Short-term financial investments reached VND2,048 billion, up 12%, while short-term receivables decreased 14% to VND931.9 billion. Inventories also decreased 15% to VND967.6 billion, reflecting a tighter inventory control policy.

The company's total liabilities were VND1,463 billion, up slightly by 1%, of which short-term debt also increased by 1%, to VND1,450.8 billion.

Notably, as of December 31, 2024, the total book value of investments in associates and other units of ACG including Thang Loi Homes Joint Stock Company is VND 406 billion, a slight increase compared to VND 405 billion as of December 31, 2023.

The investment in Thang Loi Real Estate Group Joint Stock Company was recorded at VND119.2 billion, unchanged from the previous year. However, during the period, the company issued additional shares according to the resolution of the General Meeting of Shareholders. This reduced ACG's ownership and voting rights in this enterprise from 15.55% to 9.35%.

In addition, ACG has entrusted VinaCapital with VND125.5 billion to invest in corporate bonds and enjoy an expected interest rate of 13.8%/year. These bonds matured on December 30, 2022, the company has recovered a portion of the principal and interest, and agreed to extend this receivable until December 31, 2027.

Source: https://baodautu.vn/chi-phi-quan-ly-doanh-nghiep-bao-mon-loi-nhuan-cua-go-an-cuong-d245484.html