Why did Song Da Clean Water Company suddenly report a loss?

Song Da Clean Water Investment Joint Stock Company reported a loss of nearly VND93 billion, while last year it was still profitable. The negative profit was mainly due to increased depreciation of fixed assets, increased interest expenses...

Overview of the Da River water plant reporting losses - Photo: Viwasupco

Song Da Clean Water Investment Joint Stock Company (Viwasupco) has just announced its audited financial report for 2024.

According to the report, Viwasupco's sales revenue last year reached VND594 billion, up nearly 4% compared to 2023. However, the cost of goods sold increased by 15%, so gross profit was only VND143 billion, down 21%.

This period, Song Da Clean Water's interest expense increased sharply, costing 154 billion VND, while in the same period it was 104 billion VND. Business management expenses also nearly doubled, losing nearly 81 billion VND.

As a result, Song Da Clean Water reported a loss of VND92.6 billion, while last year it still made a profit of more than VND34 billion. This is also the first year the company has reported a loss since 2011.

Previously, this famous water selling business in Hanoi had made huge profits of hundreds of billions of dong for many consecutive years.

Explaining, Mr. Nguyen Xuan Quy - General Director of Viwasupco, said the loss was mainly due to the company completing and putting into operation a number of items of the project, leading to an increase in fixed asset depreciation compared to the same period last year.

In addition, interest expenses and management costs also increased due to increased raw material costs, outsourcing costs, etc.

2010	3.69
2011	16.8
2012	0.2
2013	64
2014	89
2015	147
2016	161
2017	169
2018	218
2019	137
2020	194
2021	198
2022	201
2023	34
2024	-92.6

Data: Audited financial statements

In addition, according to Mr. Quy, other profits also decreased by nearly 6.8 billion VND compared to the previous year due to input adjustments of the project according to the State Audit's minutes.

Despite a loss last year, Song Da Clean Water's undistributed profit after tax at the end of 2024 was still up to 454 billion VND.

According to the financial statement explanation, Viwasupco recorded a long-term loan of nearly VND 2,500 billion at banks at the end of 2024. Of which, the enterprise mainly borrowed from Vietcombank Tay Ho branch with about VND 2,431 billion.

Regarding remuneration for leaders, the financial report said that last year, Mr. Le Van Thang - Chairman of the Board of Directors, received 600 million VND. Mr. Nguyen Xuan Quy, as a member of the Board of Directors, received 360 million VND, and as General Director, received 1.55 billion VND.

The predecessor of Viwasupco is Vinaconex Clean Water Company Limited, established in 2009. As of December 31, 2024, major shareholders of Song Da Clean Water include: Gelex Infrastructure Joint Stock Company holding 62.46% of shares, REE Clean Water Company Limited holding 35.95%.

The 2024 annual report said that Viwasupco is supplying water to the entire southwest of Hanoi, including the districts of Thanh Xuan, Hoang Mai, Cau Giay, Ha Dong, Nam - Bac Tu Liem and some inner-city districts of Hanoi and some other areas belonging to the urban chain water supply system "Son Tay - Hoa Lac - Xuan Mai - Mieu Mon - Hanoi - Ha Dong".

Song Da Clean Water Company has just increased its water selling price.

On March 28, the Hanoi People's Committee issued Decision No. 1799 approving the selling price of clean water for daily use of Song Da Clean Water Investment Joint Stock Company applied in Hanoi.

Accordingly, Hanoi approved the selling price of clean water for daily life of Song Da Clean Water Investment Joint Stock Company in 2025 at VND 7,767/m³ (excluding VAT).

According to Appendix 1 of Decision No. 3541 of 2023, the wholesale price of domestic water from January 1, 2024 of Song Da Clean Water Investment Joint Stock Company is 3,000 VND/m³ for 3 companies: Dong Tien Thanh Thu Do Company Limited; Tay Ha Noi Clean Water Joint Stock Company and Ngoc Hai Production and Trading Joint Stock Company.

The retail price for Viwaco Joint Stock Company is 5,820 VND/m³ and for the remaining cases it is 5,070 VND/m³.

Thus, according to the new regulation, the water price will increase to 7,767 VND/m³. Compared to the lowest selling price that Song Da Clean Water Company sold to the 3 above companies of 3,000 VND/m³, the highest water price increase this time is up to 158.9%.

It is known that this price increase is the wholesale price, while the retail price of tap water for people has not increased. The retail price of tap water for people is adjusted according to the roadmap of Hanoi City.

PHAM TUAN

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Source: https://tuoitre.vn/vi-sao-cong-ty-nuoc-sach-song-da-bat-ngo-bao-lo-20250329133454767.htm