Holding the 'gold mine' VETC, revenue of hundreds of billions of VND but profit of Tasco (HUT) is only nearly 1 billion VND
Tasco Joint Stock Company (HUT), formerly known as Nam Ha Bridge Team, was established in 1971. The company's shares were listed on the HNX on April 4, 2008 and are still the company that attracts the attention of stock investors because it owns the 'gold mine' VETC.
Since August 1, 2022, the national expressway has applied non-stop toll collection (ETC), so the business situation of Tasco (HUT) should have improved. However, the results recorded in the first quarter financial report of this unit show the opposite.
Despite owning the 'gold mine' VETC, Tasco's (HUT) profit was only nearly 1 billion VND in the first quarter, not commensurate with its revenue of 295 billion VND. (Photo TL)
Specifically, Tasco's revenue in the first quarter reached VND 295 billion, much higher than the same period in 2022. However, the cost of goods sold also increased from VND 141 billion to VND 197 billion, equivalent to an increase of 28.4%, causing gross profit not only not to increase but also to decrease slightly to VND 98 billion.
In the first quarter of this year, the company no longer recorded extraordinary financial revenue, so this target decreased 5 times from 126 billion VND to only 25 billion VND. Financial operating expenses, mainly interest expenses, are extremely large, accounting for 74 billion VND, which is also a burden on Tasco's revenue.
Notably, business management costs also increased from VND29 billion to VND45 billion, equivalent to an increase of 55%.
Because there is no longer any extraordinary profit from financial activities, interest expenses have not decreased, and business management costs have increased by one and a half times, it is not surprising that Tasco's after-tax profit is only over 910 million VND. This profit level is not commensurate with the revenue of up to 295 billion VND that Tasco achieved.
The company explained that the increase in total revenue in the first quarter mainly came from increased revenue from BOT road toll collection and ETC services. However, the decrease in financial revenue due to the lack of revenue from divestment of subsidiaries caused profits to decline.
Borrowing thousands of billions of dong exceeds equity, high interest expenses put strong pressure on revenue
By the end of the first quarter of 2023, Tasco's total assets were at VND 11,600 billion, not much change compared to the beginning of the year. However, it is worth noting that the capital structure of this unit with debt up to thousands of billions of VND, higher than the owner's equity.
Specifically, Tasco's liabilities at the end of the first quarter were VND7,726 billion, including VND2,221 billion of short-term debt and VND5,505 billion of long-term debt. Notably, long-term loans and financial leasing debts amounted to VND4,485 billion. These were mainly loans to implement BOT projects and build non-stop toll collection systems.
However, Tasco's equity is only at VND3,874 billion with owner's equity reaching VND3,486 billion. Undistributed profit after tax is VND193 billion. It can be seen that currently, Tasco's debts are higher than its equity. At the same time, in the company's revenue structure, interest is taking up a large part of VND74 billion, weighing heavily on the revenue of this unit.
Despite 'meager' profits, Tasco still poured 550 billion VND into Tasco Land
Although Tasco's business results were just enough to record a profit of nearly 1 billion VND, not commensurate with the revenue of 295 billion VND in the first quarter, Tasco's Board of Directors still approved the increase in charter capital for Tasco Land Company Limited from 200 billion VND to 750 billion VND. Corresponding to an increase in charter capital of 550 billion VND.
Tasco Land is a subsidiary of the BOT 'boss' - Tasco, established in March 2022 with the orientation of managing and developing a chain of 5-star hotels and resorts. Tasco also invested an additional 100 billion VND in Tasco Land from October 2022, raising the charter capital of this unit to 200 billion VND.
When mentioning Tasco Land, many investors will immediately recognize it because this unit is also the investor of NVT Holdings Company Limited. This is also the unit that owns 94.2% of the charter capital, equivalent to 85 million shares of Ninh Van Bay Real Estate Tourism JSC (NVT).
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