Vicostone (VCS) business cash flow decreased by 97% but still paid 20% dividend

Vicostone advances cash dividend at 20% rate, expected dividend payment is only 1/3 compared to last year

Vicostone JSC (Code VCS) was established in 2002, operating in the field of quartz stone production. On June 19, Vicostone will close the list of interim dividends for the first time in 2023 in cash at a rate of 20%, corresponding to each shareholder owning 1 share will receive a dividend of 2,000 VND.

Currently, there are about 160 million VCS shares in circulation on the market. Thus, it is expected that Vicostone will have to spend about 320 billion VND in cash to pay dividends to existing shareholders. The expected dividend payment date is June 26, 2023.

In 2023, Vicostone plans to pay a minimum dividend of 20%. Compared to the dividend payment in 2022 of 2 times, totaling 60%, this dividend payment is relatively low, the minimum is only 1/3 of the payment last year.

Q1 profit drops sharply, interest expenses increase

According to Vicostone's Q1 2023 financial statements, the company's net revenue reached VND 1,034 billion, down about 36% compared to 2022. The company's net profit from business activities in the Q1 also only reached VND 226 billion, down about 49% over the same period.

Notably, financial expenses increased from VND16 billion to VND19 billion during that period. The increase mainly came from interest expenses, showing that the company is having to increase its debt and interest expenses are putting pressure on the company's revenue.

Cash from business decreased by 97% vicostone vcs still has interest rate of 20 image 1 — Vicostone (VCS) Q1 profit decreased by 49%, the company still paid dividends at a rate of 20% (Photo TL)

On the contrary, expenses including sales expenses and business management expenses both decreased in line with the shrinking scale of revenue, at 34 billion and 12 billion VND respectively.

After deducting expenses and taxes, Vicostone's after-tax profit reached VND190 billion, down about 49% over the same period last year.

1,829 billion VND of assets "on paper", cash flow from business activities decreased by 97%

By the end of the first quarter of 2023, Vicostone's total assets reached VND6,653 billion, a slight increase compared to the beginning of the year. Notably, more than half of this amount is in the form of after-tax profits that have not been distributed to shareholders, accumulated from many years ago.

In fact, the undistributed profit after tax last year reached 4,117 billion VND, but this year it was negative 774 billion VND, so the undistributed profit after tax recorded at the end of the first quarter was only 3,342 billion VND, accounting for more than half of Vicostone's assets. And as mentioned above, Vicostone plans to pay the first interim dividend this year at only 20%, accounting for a very small part of the undistributed profit after tax.

Another notable point that investors need to note about Vicostone's assets is that most of the company's assets are short-term, accounting for VND5,631 billion, equivalent to 84.6% of total assets.

Of which, 1,829 billion VND is recorded as receivables from customers. Thus, more than 1,829 billion VND of Vicostone's assets are only recorded on paper and the company has not actually received money from customers.

Besides, assets in the form of inventory also accounted for 2,652 billion VND, an increase of more than 74 billion VND compared to the beginning of the year.

Vicostone's cash and cash equivalents only reached VND983 billion, down about 11% compared to the beginning of the year. Of which, the company is increasing its cash holdings to VND266 billion.

Although Vicostone's net cash flow from operating activities was still positive at VND11 billion, it still decreased significantly compared to last year, with a positive cash flow of VND372 billion, a decrease of 97%. The reason was that the company's receivables decreased, while its payable expenses increased to VND81 billion.

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