Truong Thanh Wood recorded a deficit after four profitable quarters

In the consolidated financial statement for the second quarter of 2022, Truong Thanh Wood Industries JSC (TTF) announced an increase of 42.3 per cent in net revenue, equivalent to nearly $26.9 million. The cost of goods sold climbed by over 50 per cent to $23.4 million, while the gross profit grew by 4 per cent to $3.2 million.

Truong Thanh Wood's rushed term got off to a poor start. Photo by Le Toan

Interest on deposits and loans climbed 48 times to $1.14 million, resulting in $896,000 in financial revenue, an increase of over $85,300 over the same period. Meanwhile, financial expenses amounted to $1.4 million, decreasing by $606,000 on-year due to interest charges of $1.3 million and a reversal of $660,000 on-year.

Selling expenses increased by 12 per cent to $1.8 million. General and administrative expenses increased by 7.8 times to $1.7 million due to the reversal of provision for bad debts of $1.14 million last year.

In addition, other income grew by 11.7 times to $1.06 million while additional expenses increased 2.5 times to $540,000. Other profits improved from minus $1.1 million to $516,000 throughout the same period.

As a result, Truong Thanh Wood recorded $461,000 profit after tax loss and $1.8 million in revenue. The profit after tax of the parent company was minus $291,000, reaching $1.83 million over the same period.

Regarding profit-loss, the company stated that it has expedited the liquidation of long-standing and outdated wood products inventory. Cash flow from liquidation will enhance operating capital and assist the purchase of new gear as well as equipment for the production of upcoming orders.

In the last six months, net sales increased by 54.6 per cent to exceed $49.5 million. Transactions of raw materials, finished products, and commodities accounted for 92 per cent of revenue in the sales and service revenue structure, totalling $45.5 million. This is a 47 per cent increase from the beginning of the year.

Profit after tax for the parent company's stockholders quadrupled to around $340,000. Because the average number of shares outstanding for the year used to compute earnings per share grew from 311,2 million shares to 411,2 million shares, basic earnings per share climbed to $0.0009 from $0.0003.

In 2022, Truong Thanh Wood expects consolidated revenue of around $96.9 million and an after-tax profit of $3 million. Thus, the unit accomplished 51.1 per cent of its revenue objective and 10.8 per cent of its profit target at the end of the first half of the year.

Nevertheless, at the end of the second quarter, Truong Thanh Wood's total assets remained unchanged from the beginning of the year. Cash and cash equivalents decreased by 35 per cent to $6.7 million. Short-term receivables increased by 19.5 per cent to $28 million. The company's inventory fell by 21.2 per cent to around $32 million.

In terms of long-term assets, the division boosted its investments in joint ventures and affiliates from approximately $3 million to $9 million. It is an investment of $5.2 million in Natuzzi Singapore and $1.15 million in Tekcom JSC.

Truong Thanh Wood's short-term loans climbed by 19 per cent to $1.48 million, while its long-term loans increased by 40.4 per cent to $650,000. The accumulated loss was $130 million as of June 30, the share capital was around $175 million, and the investment and development funds were $730,000.

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