Profit at Hung Vuong Corporation continues to plunge

Hung Vuong Corporation's divestments have been eating into its profit

Hung Vuong Corporation (HVG)'s total accumulated losses until the end of the third quarter of this financial year reached VND650 billion ($28.26 million).

HVG's net revenue in the quarter reached VND527.25 billion ($22.92 million), down 63.7 per cent compared to the corresponding period last year.

The cause of the sudden drop in revenue it that the company has cut down the business of selling animal feed materials and divested Viet Thang Feed JSC, which sharply reduced its revenue to VND1.1 trillion ($47.83 million).

Besides, the cost of goods sold (COGS) was higher than revenue, so HVG recorded a gross loss of nearly VND32 billion ($1.39 million), while the gross profit in the same period of last year was nearly VND61 billion ($2.65 million).

The price of raw fish of HVG has dropped sharply from VND34,000 ($1.48) to only VND18,000 ($0.78) per kg, a reduction of 47 per cent, so the export price also dropped, leading to a gross fall in profit.

In the third quarter of this year, HVG made no profit from selling its capital at Viet Thang Feed JSC, so its financial revenue was only a little over VND5 billion ($217,390), down VND129 billion ($5.61 million) compared to the same period last year. Meanwhile, financial expenses increased by VND8.7 billion ($378,260) despite interest expenses falling by VND12 billion ($521,740) over the same period.

In the third quarter, HVG recorded a profit of VND22.2 billion ($965,220) from its joint venture companies, while last year it lost more than VND23 billion ($1 million). Besides, thanks to the divestment from Hung Vuong Song Doc JSC and An Lac Real Estate JSC, leading to lower selling and administrative expenses compared to the same period with a total value of VND18.8 billion ($817,400).

The total accumulated losses in the first three quarters of the year amounted to VND256.7 billion ($11.16 million), still VND110 billion ($4.78 million) less than the record loss of VND366 billion ($15.91 million) in the first three quarters of 2018. The total unallocated accumulated losses until the end of the third quarter of the 2019 financial year are VND650 billion ($28.26 million).

Total inventories by the end of the third quarter are VND1.932 trillion ($84 million). Total liabilities are VND7.03 trillion ($305.65 million), an increase of VND590 billion ($25.65 million) compared to the beginning of the year.