Phu Nhuan Jewelry records second monthly loss due to COVID-19 pandemic

Phu Nhuan Jewelry had to temporarily close four out of five stores due to the pandemic

Phu Nhuan Jewelry JSC (HSX: PNJ), has just announced its financial report for August, recording the second consecutive month of loss when the company had to temporarily close more than 270 stores, accounting for about 80 per cent of the stores nationwide by the end of August.

In August, Phu Nhuan Jewelry achieved VND162 billion ($7 million) of net revenue, down nearly 87 per cent on-year, and after-tax loss of VND78 billion ($3.4 million) while in August 2020, the profit was VND52 billion ($2.26 million). In July, the company lost VND32 billion ($1.4 million).

Accumulated in the first eight months, it recorded net revenue of VND12.3 billion ($534,780), after-tax profit of VND625 billion ($27.17 million), increased by 19 per cent and 14 per cent respectively on-year.

In 2021, Phu Nhuan Jewelry expects to achieve net revenue of VND21 trillion ($913 million) and after-tax profit of VND1.2 billion ($52,170), up 20 and 15 per cent on-year, respectively. So far, it has fulfilled 59 per cent of this year's revenue target and nearly 51 per cent of the profit target.

Phu Nhuan Jewelry's retail channel still achieved a revenue growth of 21 per cent on-year. Cumulative wholesale revenue in the first eight months increased by 4 per cent and revenue from gold bars increased by 25 per cent on-year.

Gross profit margin in August was 13.3 per cent, down from the 17.7 per cent in the same period of 2020. Accumulated in the first eight months, gross profit margin declined to 18.5 from 19.2 per cent in the same period a year ago.

In its analysis report published at the end of August, Viet Capital Securities forecast that PNJ's business activities would bottom out in the third quarter and begin to recover in the fourth quarter.

“We assume that social distancing restrictions in the southern region, Hanoim and Danang, which account for about 75 per cent of PNJ's gold stores, will begin to gradually ease in the fourth quarter. This will help PNJ gradually reopen its stores with 90 per cent of stores reopening before the end of 2021. As a result, we forecast sales at existing stores to decline at a double-digit rate in 2021, followed by a double-digit increase of this rate in 2022-2023,” cited the report.

Also, in a report released in mid-September, Mirae Asset Securities once forecast that the third quarter will be Phu Nhuan Jewelry's lowest quarter of the year due to the negative impact of social distancing in many provinces and cities.