May revenue continues to decline 37%, continuing 5 consecutive months of negative growth in 2023
Vinh Hoan Corporation (code: VHC) continues to record ineffective business results due to declining export demand in some key markets. In May alone, Vinh Hoan recorded revenue of only VND954 billion, down 37% compared to the same period last year.
Export revenue in many markets plummeted, including: the US market decreased by 54%, to VND373 billion; the Chinese market decreased by 30%, to VND93 billion; the European market decreased by 27%, to VND142 billion; in the Vietnamese market, revenue also decreased by 12%, reaching only VND224 billion.
Not only in the first quarter, Vinh Hoan's (VHC) business results in April and May continued to decline due to plummeting export revenue in many markets (Photo TL)
In the previous April, Vinh Hoan's revenue also decreased by 47%, to only VND869 billion, showing that the decline in export orders is not just a temporary trend but is an issue that the company needs to pay attention to right now.
Q1 profit drops 60%, interest expense doubles in first 3 months
According to the financial statements for the first quarter of 2023, Vinh Hoan recorded net revenue of VND 2,222 billion, down 32% over the same period last year. Revenue decreased, and sales expenses were also reduced from VND 84 billion to just over VND 50 billion.
However, in return, business management costs increased by 17.5% to VND69 billion. Financial costs, mostly interest expenses, increased sharply, from VND42 billion to over VND90 billion, showing that the company is having to increase debt in its capital structure.
The pressure of increasing interest expenses has significantly affected the company's after-tax profit, which was only recorded at VND226 billion, down more than half compared to the same period last year.
Stock investment loss 47%, 3 company leaders consecutively resign in just 3 days
Vinh Hoan's business situation is also partly reflected through the company's asset structure. At the end of the first quarter of 2023, Vinh Hoan's total assets did not fluctuate much, remaining at VND 11,665 billion. Of which, short-term assets accounted for VND 7,714 billion, cash and cash equivalents accounted for VND 848 billion.
Notably, in short-term assets, Vinh Hoan's short-term financial investment index decreased quite sharply, from VND 1,768 billion at the beginning of the period to only VND 1,270 billion. Of which, the company spent up to VND 179 billion on securities investment. And it should be noted that as of March 31, 2023, this investment only recorded a value of VND 95 billion. Thus, at the end of March, Vinh Hoan's securities investment temporarily lost 47%.
Also in the first 3 months of this year, the company's short-term debt increased from VND2,214 billion to VND2,658 billion, equivalent to an increase of VND444 billion in just 3 months. The most significant debt is worth VND1,157 billion at HSBC Vietnam Bank. In addition, Vinh Hoan also owes the Joint Stock Commercial Bank for Foreign Trade of Vietnam and ANZ Bank Vietnam Limited with two debts worth VND655 billion and VND579 billion.
Immediately after recording ineffective Q1 business results, Vinh Hoan also received resignation letters from 3 senior leaders in just 3 days. The incident caused a stir among the company's shareholders for a period of time.
Specifically, on April 12, 2023, Mr. Nguyen Van Khanh, an independent member of Vinh Hoan's Board of Directors, submitted his resignation due to the inability to arrange time for work. Mr. Khanh was also the Deputy Director in charge of operating the Ho Chi Minh City branch of Bao Viet Securities Corporation at that time.
The following day, April 13, 2023, Ms. Phan Thi Kim Hoa, a member of the Board of Supervisors, also submitted her resignation. On April 14, 2023, Mr. Le Van Nhat, an independent member of the Board of Directors, also submitted his resignation due to lack of time for work.
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