Mattress maker Vua Nem records positive financial performance in first four months

June 06, 2024 | 11:47
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Vua Nem JSC, Vietnam's biggest mattress retailer, is officially debt-free and achieved its profit target in the first four months of 2024.
Mattress maker Vua Nem records positive financial performance in first four months

Vua Nem has successfully eliminated its bond debt, aligning with its strategic financial objectives. The company has fully settled obligations related to a bond issuance valued at VND150 billion ($5.9 million) which matured on May 26.

"We have consistently adhered to the principle of early or on-time bond buybacks and full interest payments, saving the company VND4.5 billion ($117,000) in bond interest costs," stated Nguyen Thanh Huyen, CEO of Vua Nem. "This strategic financial management step reinforces our commitment to investors and enhances operational efficiency."

Vua Nem initially issued bonds in 2022 with an annual interest rate of 12.5 per cent to finance the expansion and upgrade of its retail network and to increase working capital.

By the end of March this year, the company had repurchased over VND104.3 billion ($4.1 million) in bonds ahead of schedule.

The timely repayment of its bond debt has been attributed to prudent financial management, specific strategic commitments, and stable revenue streams from retail operations.

In the first four months of 2024, Vua Nem's store-level earnings before interest, taxes, depreciation, and amortisation (EBITDA) also showed significant improvement, growing by 155 per cent year-on-year and meeting nearly 100 per cent of the budgeted target.

The company also optimised its operating cost-to-revenue ratio by over 25 per cent and increased its gross profit margin by approximately 12 per cent. Consequently, the company's EBITDA-to-revenue ratio improved from -11.5 per cent in 2023 to +4 per cent in the same period this year.

In four months, Vua Nem's post-tax profit surpassed the target of VND4 billion ($157,356). For 2024, the company aims to achieve a 13 per cent increase in revenue compared to 2023, targeting a positive post-tax profit. In 2023, Vua Nem reported a loss of VND91 billion ($3.6 million).

To achieve these ambitious goals, Vua Nem has outlined three core optimisation priorities. Specificially, Vua Nem will enhance operational efficiency across its physical stores and online channels, aiming for a store-level EBITDA-to-revenue ratio of 20.4 per cent, an increase of 5 per cent from 2023. The company will also streamline costs and strengthens cash flow, targeting a company-level EBITDA-to-revenue ratio of 8.1 per cent. Another priority is refining product offerings and maintaining competitive pricing to support customers amid economic fluctuations.

"Our approach is not to chase market trends but to develop high-quality products using superior materials, eliminating intermediaries, and delivering goods directly from the factory to the store at reasonable prices for consumers," emphasised Huyen.

Vua Nem will continue to introduce products such as foam mattresses, spring mattresses, foam rubber mattresses, and ergonomic pillows, all priced competitively to affirm its commitment to enhancing sleep quality for millions of Vietnamese consumers.

Recently, the company launched the "Summer Cooling Collection", featuring Doona Aqua cooling mats and Amando Ice Silk cooling blankets, incorporating advanced body temperature regulation technology to offer a cool and comfortable experience suited for the tropical climate.

Mattress maker Vua Nem records positive financial performance in first four months

The Amando Ice Silk cooling blanket, made with quick-cooling fabric and a lightweight microfiber core, offers a comfortable touch, while the Doona Aqua cooling mat helps regulate body temperature during hot summer days with its breathable, elastic rubber core.

"Every product provided by Vua Nem is based on a deep understanding of the Vietnamese market. By choosing Vua Nem's products, users can enjoy better, deeper sleep, which enhances their health and overall quality of life for themselves and their families," stated the CEO.

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