THACO records lowest profit in five years

THACO has faced constraints on multiple fronts in the first half

According to the semi-annual audited financial statement of 2019, THACO recorded a revenue of VND26.85 trillion ($1.17 billion), down 3 per cent compared to the same period a year before.

The revenue went down, reducing gross profit to VND4.9 trillion ($213 million). In particular, the company's performance in this period also decreased as the gross profit margin decreased from 19.7 per cent in the first six months of 2018 to 18.25 per cent.

This decline in revenue was exacerbated by rising expenses. Financial expenses nearly doubled to VND1.22 trillion ($53 million). Sales expenses of the corporation increased by 32 per cent and administrative expenses increased by 8 per cent. These added expenses made THACO's net after-tax profit shrink.

This is the lowest semi-annual profit that THACO reported since 2015. In the previous years, the corporation's profit in the first half of the year was around VND3 trillion ($130.43 million).

One of the expense categories seeing the strongest increase, interest payments grew by nearly 2.5 times to VND678 billion ($27.48 million) in these six months. On average, the company also has to spend VND3.8 billion ($165,217) a day to pay interest.

The reason is that the company has taken up VND6.55 trillion ($284.78 million) worth of short- and long-term debts in the last half, bringing its total debts to over VND31.4 trillion ($1.37 billion).

Recently, THACO also spent nearly VND35 trillion ($1.52 billion) to pay loans, up approximately VND10 trillion ($434.78 million) on-year.

Recently, Dai Quang Minh Real Estate Investment Corporation (a subsidiary of THACO) has officially acquired the entire real estate assets of Hoang Anh Gia Lai JSC.

After this transaction, THACO president Tran Ba Duong via Dai Quang Minh will own 100 per cent of the capital of the Hoang Anh Myanmar complex project, which is also the last real estate project of Hoang Anh Gia Lai.