Q3 profit drops 70%, not even half of plan achieved
In the context of the current economic recession, Sao Mai Group (ASM)'s business results also showed clear signs of decline. Specifically, Q3 revenue recorded VND 2,874.5 billion, down 14% over the same period. Cost of goods sold decreased by 11.3% to VND 2,569.9 billion.
Gross profit decreased by 31.2% to VND304.6 billion. Gross profit margin accordingly decreased to only 10.6%. Financial revenue did not change significantly, recorded at nearly VND56 billion.
Sao Mai Group (ASM) profit decreased by 70%, had to sell subsidiary (Photo TL)
However, it is worth noting that financial expenses increased significantly in the third quarter. Financial expenses increased by 37.5% to VND167.8 billion. The majority of which was interest expenses, showing that Sao Mai Group is increasing its debt, leading to increased interest expenses, eroding a large portion of revenue.
Due to the decrease in revenue, the cost of sales also decreased by more than half, to 35.7 billion VND. However, the cost of business management increased dramatically by 41.6%, accounting for 72.5 billion VND. As a result, ASM's after-tax profit reached 66.4 billion VND, down 70.5% compared to the same period.
Accumulated revenue and profit in the first 9 months of the year of Sao Mai Group reached 9,179.8 billion and 257.6 billion VND respectively, down 13% and 71.5% respectively compared to the same period last year. Compared to the target set at the beginning of the year, Sao Mai Group has only completed 47.3% of the profit target.
Business decline, Sao Mai Group divests capital from subsidiary
Notably, in the context of declining business results, Sao Mai Group has just approved a plan to divest capital from a subsidiary. Specifically, Sao Mai Group has divested 866,000 shares at Financial Investment Consulting JSC (Astar) at a selling price of no less than VND10,000/share.
Thus, if fully divested, ASM will earn at least VND 8.66 billion. The expected time for divestment is December 2023. The recipients of the transfer of shares are partners, organizations and individuals with financial capacity and business policies suitable for Astar Company.
About Astar Company, a subsidiary of Sao Mai Group, this unit was established in 2000. The company's registered address is in My Long Ward, Long Xuyen City, An Giang Province. The company operates mainly in the fields of architecture and related technical consulting.
Debt exceeds equity
Not only the divestment from subsidiaries, Sao Mai Group's asset structure and capital sources are also showing some negative signs.
As of the end of the third quarter of 2023, ASM's total assets reached VND 19,414 billion, an increase of VND 328 billion compared to the beginning of the year. Cash and cash equivalents currently account for VND 859.2 billion.
The majority of Sao Mai Group's assets are recorded in the form of fixed assets, accounting for VND 6,620.9 billion, equivalent to 34.1% of total assets. Short-term receivables account for VND 4,309 billion, equivalent to 22.2% of total assets. Inventories simultaneously recorded VND 3,659.9 billion, accounting for 18.85% of total assets.
In ASM's capital structure, liabilities account for a large proportion of 59.6%, equivalent to VND 11,577 billion. Notably, the group's short-term and long-term financial debt accounts for VND 10,125 billion, much higher than equity.
Of which, short-term debt accounts for 5,864.5 billion VND, long-term debt accounts for 4,260.7 billion VND. Owner's equity accounts for 7,837 billion VND, undistributed profit after tax accounts for 1,311 billion VND.
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