Companies in Vietnam predict significant loss due to COVID-19

As business stagnates during the COVID-19 pandemic, companies in VIetnam predict major reductions in revenue

Indochina Research in collaboration with the French Chamber of Commerce and Industry in Vietnam has prepared the latest report on the impacts of COVID-19 on businesses. The results of the survey come from 116 companies operating in various fields in Vietnam. The survey was conducted from March 25 to April 3, 2020.

Accordingly, all respondents anticipate a loss in revenue. Half of them believe the loss could represent at least 30 per cent this year. Among the problems arising from the crisis, international mobility and cash flow are the most frequently mentioned. Large firms are mostly impacted by procurement limitations.

Given the uncertainty of the COVID-19 crisis, all respondents have implemented a number of measures to protect their employees and adjust their activity. Remote working (74 per cent), cancelling business trips (70 per cent), and enforcing prevention measures (50 per cent) are the main ones.

If staff dismissal measures are now taken by only a few companies (17 per cent), almost half are already considering some potential layoffs. The higher intentions of layoff are in the service sector like tourism, retail, and business services.

According to the survey, 68 per cent of companies are facing high risks of order delays or cancellations. Meanwhile, 60 per cent of companies face some cash flow problems and the survival of one-third is at stake.

About half of the respondents consider cash flows to be a threat to their company in the coming three months and 10 per cent are facing issues in the very short term (1 month).

The anticipated need for cash flow is €10 million ($10.95 million) by the end of June, growing to €20 million ($21.9 million) by the end of 2020.

The measures considered of the highest interest are delays or cancellation of PIT, VAT, SI, and CIT. Teh cancellation of PIT would indeed benefit both employers and employees by supporting the economy with increased consumption once the activity restarts.