Saigontel contributes 11.5 billion VND to establish a new legal entity
Saigon Telecommunication Technology Joint Stock Company - Saigontel (SGT) has just announced its capital contribution with partner STS Development Co., LTD from Korea to establish a new legal entity, Saigontel STS Vietnam Company Limited.
The charter capital of this legal entity is 23.5 billion VND. Of which, Saigontel will contribute 49% of the charter capital, equivalent to 11.5 billion VND. The registered address of Saigontel STS is on the 6th floor, 12 Pham Dinh Toai, Vo Thi Sau Ward, District 3, Ho Chi Minh City.
Saigontel's (SGT) debt swelled to VND2,545 billion, exceeding 31% of equity (Photo TL)
The representative of Saigon Telecommunication Technology's capital contribution at the new legal entity Saigontel STS is Ms. Nguyen Cam Phuong, born in 1976.
Saigontel’s capital contribution to establish a new legal entity took place in the context of the company’s business results facing a number of problems. In particular, after-tax profit in the first 6 months of the year decreased, debt grew larger and larger, surpassing equity.
Q2 is bright, but first-half profit still down 81.9%
In the second quarter of 2023, Saigontel's net revenue from providing goods and services reached VND 388.5 billion. Of which, the majority of revenue was recorded from trade and service activities, the rest came from land, office and factory leasing activities.
However, cost of goods sold accounted for 328.2 billion VND, causing gross profit to be only 60.3 billion VND, gross profit margin in the period only reached 15.5%.
Financial revenue in the second quarter reached 6.3 billion VND, down 2/3 compared to the same period, while financial expenses also dropped sharply to only 21.4 billion VND. However, the majority of this was interest expenses, which tended to increase from 18.6 billion to 21.1 billion VND, showing that the company is tending to increase debt.
Sales expenses and administrative expenses were recorded at VND735 million and VND19.7 billion, respectively. Overall, these two types of expenses were reduced compared to the same period last year. Saigontel's after-tax profit in the second quarter reached VND17.2 billion, a relative improvement compared to the loss of VND60.4 billion in the same period.
Although the second quarter business results have improved compared to the same period, it is still not enough to revive Saigontel's semi-annual business results.
Accumulated revenue by the end of June reached VND481.8 billion, down 16.3% over the same period. Accumulated profit after tax reached VND22.7 billion, down 81.9%.
The reason for the sharp decline in revenue was the high cost of goods sold, which caused a decrease in gross profit. In addition, interest expenses increased to 38.8 billion and business management costs increased to 43.4 billion, which also eroded a part of revenue.
Debt is growing bigger and bigger, up to 2,545 billion, exceeding equity by 31%.
Saigontel's total assets at the end of the second quarter were recorded at VND6,136.8 billion, up 11.8% compared to the beginning of the period. However, this increase mainly came from debt.
Cash and cash equivalents are currently at VND137 billion, while bank deposits are VND83.5 billion. The company recorded a sudden increase of nearly 4 times in receivables from customers, up to VND436 billion.
In addition, the amount of short-term prepayments to sellers also increased 2.3 times, up to 709.6 billion VND, showing that the unit is having a relatively large amount of capital stagnant. This can cause an imbalance in cash flow in the short term.
Regarding long-term assets, Saigontel currently has VND808.3 billion invested in affiliated companies. In addition, the company also invested VND700 billion in other units. Notably, these long-term financial investments are having to record a loss provision of VND135.1 billion.
Regarding capital structure, Saigontel's short-term debt is increasing, from VND 1,536.4 billion to VND 1,691.4 billion. Long-term debt is increasing even more strongly, from VND 369.1 billion at the beginning of the period to VND 854.5 billion, equivalent to an increase of nearly VND 500 billion in just the first 6 months of the year.
Saigontel's total debt has reached VND2,545.9 billion. Meanwhile, Saigontel's equity is only recorded at VND1,943.8 billion. It can be seen that Saigontel's debt is 31% higher than its equity, not to mention other payable indicators.
During the period, Saigontel recorded receivables from customers of up to VND436 billion, of which VND709.6 billion had to be paid in advance to partners. Therefore, it is not difficult to understand why this unit fell into a state of cash flow imbalance. Net cash flow from business activities was negative VND466.3 billion while in the same period it was positive VND150.8 billion.
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