Escaped loss in Q2 thanks to financial revenue
In the second quarter of 2023, Ho Chi Minh City Infrastructure Investment Joint Stock Company (Code CII) recorded net revenue of VND 843.3 billion, down about 15.2% over the same period. Cost of goods sold accounted for VND 641.6 billion, the company's gross profit reached VND 250.6 billion, down 55.4% over the same period. Gross profit margin also decreased from 45.5% to only 23.9% over the same period.
Notably, financial revenue increased sharply during that period, from VND259.5 billion to VND461.9 billion, an increase of 128.2%. Most of which came from interest on investment cooperation, capital support, deposits and bonds.
CII just escaped a loss in the second quarter thanks to financial revenue (Photo TL)
Although financial revenue increased, financial expenses also increased by 41.2% to VND454.8 billion. This expense is putting great pressure on the company's revenue.
Business administration expenses and selling expenses both decreased, recorded at VND35.8 billion and VND121.6 billion, respectively. Profit after tax in the second quarter reached VND83.3 billion.
Although the company recorded a profit, if we consider the profit from the main business activities, excluding financial revenue, the company is losing up to 374.8 billion VND. The company only escaped the loss in the second quarter thanks to recording unusual financial revenue.
Profit dropped 85%, first 6 months of the year only completed 9.3% of the year's profit plan
The second quarter profit recorded in CII’s business results report did not come from its core business activities. This gloomy situation even lasted from the first quarter when the company recorded revenue of only VND748.1 billion and after-tax profit of only VND34.8 billion.
By the end of the second quarter, CII's accumulated revenue reached VND1,591.3 billion, down 6.8% year-on-year. Accumulated profit after tax reached VND118.2 billion, down 85.2% year-on-year. Profit after tax of the parent company's shareholders only reached VND43.5 billion, down 94%.
Compared with the business target set at the beginning of the year with revenue of VND 5,155 billion and profit after tax of parent company shareholders of VND 469 billion, at the end of the first 6 months of the year, the company only completed 30.9% of the revenue plan and 9.3% of the annual profit plan.
Huge debt of 13,000 billion, CII has to pay 4 billion VND in interest every day
One of the most obvious problems on CII's financial statements is that its debts are "bloating". The pressure to repay bonds remains and will be an issue that the company needs to address in the future.
CII's total assets as of the end of the second quarter reached VND26,649.2 billion, down 6.7% compared to the beginning of the year. Of which, the company is holding VND954.6 billion in cash and cash equivalents. In addition, CII is holding an additional VND2.5 billion in bank deposits and VND615.6 billion in securities investments.
In CII's capital structure, short-term debt is showing an increasing trend, from VND5,166.4 billion to VND6,039.4 billion, an increase of VND873 billion in just half a year.
In addition, long-term debt is currently accounting for VND 7,112.3 billion. If we calculate the total of short-term and long-term debt, CII is currently borrowing up to VND 13,151.7 billion. That is not to mention other payable obligations recorded on the financial statements.
The debt of VND13,151.7 billion is even 62.2% higher than the owner's equity, showing a huge risk in CII's capital management. In the second quarter alone, the total interest expense that CII had to pay was VND363.6 billion. This means that the company is paying up to VND4.04 billion in interest every day.
In addition, as of June 30, 2023, the company confirmed that the payment schedule for loans within 12 months amounted to VND 5,107.7 billion. The amount of bond debt to be paid within 12 months also amounted to VND 2,004.7 billion.
With the above pressures on debt and interest expenses, it is not difficult to understand why CII's cash flow from business operations in the first 6 months of the year was negative 368.6 billion VND.
Source
Comment (0)