Dong A Plastics (DAG) continuously suffers losses, debt accounts for 98%, shares suspended from trading

6 consecutive quarters without bringing in a single penny of profit

Dong A Plastic Joint Stock Company (DAG), formerly Dong A Plastic Production and Trading Company Limited, has been present in the market since 2001 and is a famous brand in the production of plastic products used in the construction and advertising industries.

Since the beginning of 2023, DAG's business operations have gone through a terrible period with 6 consecutive quarters without bringing in a single penny of profit.

Dong A Plastics (DAG) has suffered losses for 6 consecutive quarters, equity has been eroded due to losses, remaining at just over 4% (Photo TL)

Specifically, DAG's loss period started in the first quarter of 2023, the company recorded revenue of VND 558.8 billion, loss after tax of VND 21.4 billion. The loss situation increased to its peak in the second quarter of 2023 with VND 102.7 billion.

In the last 6 months of 2023, DAG's revenue continuously plummeted, down to 213.8 billion and 30.7 billion VND respectively, DAG lost 16.2 billion and 22.3 billion VND respectively in these 2 quarters.

Entering 2024, DAG recorded Q1 revenue of VND30.3 billion, with a loss after tax of VND15 billion. Q2/2024 business results were also not very bright, even worse than before. Revenue was only VND55.3 billion, but cost of goods sold accounted for VND81.1 billion, causing the company to have a gross loss of VND10.7 billion.

In addition, pressure from interest expenses still accounted for 36.5 billion VND and business management costs of 4.3 billion VND, causing DAG's after-tax loss to reach 66.6 billion VND.

Equity was almost completely eroded due to losses.

Consecutive losses have caused Dong A Plastics to have major problems in maintaining capital for business operations.

At the end of the second quarter of 2024, the company's total assets were 1,394.8 billion VND. Of which, cash was only recorded at 843 million VND. Accounts receivable from customers were recorded at 298.9 billion VND and inventories accounted for 535.5 billion VND. In addition, fixed assets also accounted for 560.6 billion VND.

DAG's current capital structure is mostly from debt. Specifically, payables account for VND 1,367.6 billion, equivalent to 98% of total capital. Of which, short-term debt accounts for VND 733.6 billion, long-term debt accounts for VND 412.1 billion.

The original owner's equity was 603.1 billion, but due to continuous losses, it was eroded to only 27.3 billion. This remaining equity is equivalent to just over 4% of the total capital. The reason is that the undistributed loss after tax recorded on the financial statements is up to 641 billion VND.

Dong A Plastics shares suspended trading

With recent poor business results, Dong A Plastics' shares have just been suspended from trading by the Ho Chi Minh City Stock Exchange (HoSE).

Previously, DAG shares were restricted from trading from May 17, 2024 because the listed organization was 45 days late in submitting its 2023 audited financial statements compared to regulations.

On August 2, 2024, HoSE issued a letter reminding Dong A Plastics of its delay in disclosing information. Based on the continuous violations of information disclosure activities, HoSE has transferred DAG shares to the trading suspension list from August 15, 2024.

In addition, DAG was also put on warning because the auditing organization had an exception opinion on the company's 2023 financial statements and the undistributed profit after tax on the audited consolidated financial statements in 2023 was negative 588.1 billion VND.

On the stock market, DAG shares have continuously lost value over the past year. From the price of 3,100 VND/share at the beginning of 2024, at the session on August 9, 2024, DAG code was only 1,670 VND/share, equivalent to losing nearly half of its value.

Source: https://www.congluan.vn/nhua-dong-a-dag-lien-tuc-thua-lo-no-chiem-98-co-phieu-bi-dinh-chi-giao-dich-post307273.html