Vinaconex (VCG) poor business, Pacific Holdings sells 18.25 million shares

Pacific Holdings sells 18.25 million shares out of 19.9 million registered VCG shares

Pacific Holdings Corporation has just announced the results of the transaction of registering to sell 19.9 million VCG shares. Of these, 18.25 million shares were sold in early May. The transaction was carried out with the aim of restructuring Pacific Holdings' investment portfolio.

Before the transaction, Pacific Holdings held 273 million shares, equivalent to 56.19% of charter capital. Thus, after the transaction was completed, Pacific Holdings reduced its ownership ratio to only 254.8 million shares, equivalent to about 52.44% of charter capital at Vinaconex.

Vinaconex's (VCG) first quarter business performance dropped 98%, Pacific Holdings immediately sold 18.25 million shares (Photo TL)

In the first quarter of 2023, Pacific Holdings also made another divestment transaction from Vinaconex from March 20 to April 6. In this transaction, Pacific Holdings also sold a total of 32.6 million VCG shares, earning VND684.6 billion. After this transaction, Pacific Holdings reduced its ownership ratio from 60.23% to only 56.19%.

Q1 profit evaporates 98%, no more profit from buying and selling subsidiaries

Vinaconex's first quarter business results in 2023 really surprised many investors, because revenue only decreased slightly but profits "evaporated" by 98% compared to the same period.

In the first quarter, Vinaconex's net revenue reached VND1,965.1 billion, up 1.5 times compared to the same period last year and slightly up compared to the previous quarter. However, the company's after-tax profit was only VND18.8 billion.

In the first quarter of 2023, Vinaconex achieved revenue of VND 1,333.1 billion but profit after tax was up to VND 779.9 billion. Thus, it can be said that Vinaconex's profit has decreased by 98% compared to the same period last year.

The reason is explained that in the first quarter of 2022, the company recorded a sharp increase in financial revenue, up to 736 billion VND, compared to only 92.9 billion VND this year. The difference of 598 billion VND comes from the cheap purchase of subsidiaries in the first quarter of 2022.

Although the reason is like that, objectively speaking, it can be seen that when there was no longer any profit recorded from the cheap purchase of subsidiaries, Vinaconex's main business activities immediately revealed weaknesses, and profits immediately decreased significantly.

Another notable point is that financial expenses incurred during the period also increased to VND 226.8 billion, losses from operations of joint ventures and associates also increased to VND 40 billion, and business management expenses increased to VND 86.7 billion.

A series of increased costs simultaneously caused Vinaconex's first quarter profit to drop to only VND18.8 billion.

More than 1,130 billion VND in bad debt and 2,300 billion VND in revenue are still "on paper"

Vinaconex's total assets as of the end of the first quarter of 2023 reached VND20,145.4 billion, a slight increase compared to the beginning of the year. Of which, cash and cash equivalents have decreased by nearly half, from VND1,710.2 billion to only VND950.8 billion. This shows a change in the liquidity of the assets that Vinaconex is holding.

The receivables from customers account for a high proportion of VND2,298.6 billion, showing that Vinaconex is recording a large amount of revenue only on paper. In addition, the amount that the company has had to pay in advance to partners has reached VND4,976.9 billion, also showing a significant risk in the asset structure.

Another point that investors need to pay attention to about Vinaconex's assets is that Vinaconex's bad debts as of March 31, 2023 also amounted to VND 1,130.5 billion.

In Vinaconex's capital structure, liabilities account for a large proportion of VND22,550.2 billion, equivalent to 69.4% of total assets. The amount of money that Vinaconex is borrowing is also up to VND14,114.5 billion, higher than the owner's equity.

Source: https://www.congluan.vn/loi-nhuan-quy-1-cua-vinaconex-vcg-giam-98-pacific-holdings-ban-tiep-1825-trieu-co-phieu-post247978.html