Chuong Duong Sarsaparilla increases revenue, prolongs loss streak

Chuong Duong Sarsaparilla's revenue increased by 66% to VND36 billion in the third quarter of 2024 and its after-tax loss was reduced by more than half compared to the same period, but the series of consecutive losses continued to the 15th quarter.

Chuong Duong Sarsaparilla's revenue increased by 66% to VND36 billion in the third quarter of 2024 and its after-tax loss was reduced by more than half compared to the same period, but the series of consecutive losses continued to the 15th quarter.

The financial report of Chuong Duong Beverage Joint Stock Company (stock code: SCD) recorded net revenue in the third quarter of 2024 of more than VND 36.2 billion, an increase of 66% over the same period. After deducting cost of goods sold, the company's gross profit was VND 6.2 billion, more than 5 times higher than the same period in 2023. Gross profit margin accordingly increased from 0.6% to 17%.

The expenses of the enterprise owning the brand name Sarsaparilla Chuong Duong all fluctuated strongly during this period. Specifically, the interest expense was more than 10.1 billion VND, while in the same period last year it was only about 4.8 billion VND, and the selling expense increased by 18% to 6.1 billion VND. On the contrary, the selling expense decreased from 25.6 billion VND to nearly 4 billion VND.

After calculating other expenses such as land rent, transportation, depreciation, the owner of the Sarsaparilla brand Chuong Duong reported a loss after tax of VND12.4 billion, down more than half compared to the loss of VND35.4 billion in the same period. This is the company's lowest loss in the past 6 quarters.

In an explanatory document sent to the Hanoi Stock Exchange, the board of directors said the company had optimized costs and boosted business. As a result, third-quarter revenue improved and after-tax profit decreased significantly compared to the same period in 2023.

In addition, Chuong Duong Sarsaparilla is focusing on improving performance, increasing coverage and distribution channels to increase sales volume, focusing mainly on opening more distributors in the Southern region. The company believes that this solution will help overcome losses and return to profit in the near future.

Chuong Duong Sarsaparilla achieved revenue of more than 36 billion VND in the third quarter of 2024 and extended its after-tax loss streak to the 15th quarter.

In the first 9 months, the company recorded revenue of approximately VND 135 billion, up 55% over the same period last year. Gross profit reached VND 35.4 billion, gross profit margin of more than 26%. After-tax loss was more than VND 44.6 billion, down 39% compared to the loss of VND 73.5 billion in the first 9 months of 2023.

The company's board of directors believes that business activities have good growth prospects this year, so the target net revenue from sales and service provision is more than VND225 billion, 78% higher than last year. However, the board of directors also believes that the strong growth of competitors is a big challenge in the company's efforts to expand market share, plus the cost of outsourcing services is still high. Therefore, this year's plan is to lose more than VND73 billion after tax, extending the loss streak for the fourth consecutive year.

After the first 3 quarters of the year, the company completed 60% of its revenue plan and its after-tax loss decreased significantly compared to the company's target.

At the annual meeting held in April, the board of directors of Chuong Duong Sarsaparilla said that this year the company will continue to revive and develop old brands, while launching a line of healthy beverage products.

In addition, the company said it will rebuild its sales management team, restore and increase sales coverage as well as distribution network in Ho Chi Minh City and neighboring provinces such as Long An, Tay Ninh, Dong Nai, Binh Duong, Ba Ria - Vung Tau. To expand distribution and increase output, the management board plans to penetrate other potential areas with the goal of having at least one distributor in each province.

“The company will also further optimize cost of goods sold, while minimizing the possibility of increased prices of raw materials and packaging,” said the company's management board.

As of September 30, the Company's total assets were over VND642 billion, a slight decrease from VND688 billion at the beginning of the period. Liabilities were insignificantly different from the beginning of the year, reaching VND699 billion. Short-term items accounted for the majority of the Company's debt structure with about VND522 billion. Owner's equity was negative VND56.4 billion, while in the same period it was negative VND11.7 billion. Undistributed loss after tax was nearly VND246 billion.

Previously, the after-tax loss of VND119.25 billion in 2023 caused the company to be delisted by the Ho Chi Minh City Stock Exchange (HoSE) from May 6 because "the production and business results were losses for 3 consecutive years or the total accumulated loss exceeded the actual contributed charter capital, or the owner's equity was negative in the most recent audited financial statement".

On May 15, the Hanoi Stock Exchange allowed this stock to be traded on the UPCoM market. However, immediately after being listed on UPCoM, SCD was immediately put on a restricted trading list for the reason that "the company was previously delisted due to negative equity in the audited financial statements for 2023". According to this decision, the stock can only be traded on Fridays every week.

On the stock exchange, SCD shares are currently around VND16,000, up nearly 37% compared to the reference price of the first trading session on the UPCoM market of VND11,700.

Source: https://baodautu.vn/sa-xi-chuong-duong-tang-doanh-thu-keo-dai-chuoi-lo-d228143.html