An auto company massively 'dumps' inventory at the end of the year, marking 14 years of continuous losses

Owning a distribution system in Hanoi, Ho Chi Minh City and many other provinces, Giai Phong Auto still reported net losses for more than a decade.

An imported car product distributed by Giai Phong Auto - Photo: GGG

Giai Phong Auto Joint Stock Company (GGG) has just announced its financial report for the fourth quarter of 2024 with revenue increasing dramatically, nearly 11 times compared to the same period last year, reaching nearly 17.3 billion VND.

However, due to selling below cost price, this business suffered a gross loss of more than 1 billion VND. Not to mention many other costs such as interest, sales and business management, so the final after-tax profit was still negative 4 billion VND in the last quarter of the year.

In the whole year of 2024, Giai Phong Auto achieved revenue of more than 22.6 billion VND, nearly 10 times higher than the previous year.

However, due to the cost of goods reaching nearly 28 billion VND, interest expense of more than 10 billion VND, pre-tax profit was negative 18.2 billion VND, higher than the loss of more than 15 billion VND in 2023.

Mr. Nguyen Cuong - Chairman of the Board of Directors of Giai Phong Auto - said that in the fourth quarter of 2024, although revenue had good growth compared to the same period last year, it was still low. Therefore, the set plan was not achieved.

"Costs remain high, especially high interest costs. The company cannot borrow from banks so it has to borrow from other sources with very high interest rates," said Mr. Cuong.

Explaining why revenue is high but losses are heavier, the company's leaders said that some inventory vehicles had to be sold at a loss to recover capital, contributing to the increase in losses.

Giai Phong Auto's loss-making situation has lasted from 2011 until now, with no end in sight. The accumulated loss by the end of 2024 has reached more than 344 billion VND.

	Revenue	Profit after tax
2010	197	2.7
2011	86.58	-65.25
2012	47.59	-27.34
2013	46.9	-67.9
2014	61.26	-12
2015	137.8	-7.9
2016	60.9	-18
2017	101.3	-7.2
2018	90.2	-9.8
2019	92.2	-21.8
2020	77.5	-29.2
2021	89.9	-22
2022	37.2	-24.1
2023	2.39	-15.4
2024	22.61	-18.2

Data: Financial statements, TTO

As of December 31, 2024, Giai Phong Auto's total assets decreased to VND 35.14 billion, while liabilities were more than VND 85 billion. Short-term debt has surpassed short-term assets, raising many concerns about financial capacity.

Due to the promotion of "clearing" inventory at the end of the year, the value of inventory from more than 21 billion VND at the beginning of the year has decreased to more than 13.89 billion VND. Cash and cash equivalents are more than 275 million VND.

Giai Phong Auto Company shares react strangely

Giai Phong Auto, formerly Ha Giang Electromechanical Joint Stock Company, was established in 2001, specializing in automobile manufacturing, assembly and trading.

By the end of 2008, the company began to change to Giai Phong Auto Joint Stock Company. Currently, the owner is in the red with nearly 50 billion VND.

The auto company's GGG shares were listed on HNX in 2009, but were delisted due to consecutive losses and moved down to trading on UpCom, where they can only be bought and sold every Friday due to restrictions.

Notably, despite announcing a loss in business results, in the trading session on January 17, Giai Phong Auto's GGG stock still increased to the ceiling price, up to VND1,900/share.

Source: https://tuoitre.vn/mot-cong-ty-o-to-o-at-xa-hang-ton-cuoi-nam-danh-dau-14-nam-thua-lo-rong-ra-20250117150950194.htm