Viet Tien foresees 70 per cent drop in profit due to COVID-19

Viet Tien will organise the shareholders' meeting on May 24

Viet Tien has just published the documents related to its coming shareholders' meeting that will take place on May 24.

The global textile market in 2019 experienced many rises and falls due to the US-China tension, protectionism, and changing technical barriers. This also hampered consumption at big markets, putting much burden on garment firms.

The difficulties of Viet Tien are not unique. The company’s latest financial report showed that its net sales last year reached nearly VND9.036 trillion ($392.87 million), down 7 per cent on-year. The pre-tax and after-tax profit hit VND504 billion ($21.9 million) and VND418 billion ($18.17 million), down 13 and 12 per cent on-year, respectively.

Despite the fact that the 2019-performance was not as bright as expected, the firm’s leader board is still confident in its capacity for profit. According to the documents, most subsidiaries and joint-venture companies earned profit. As of the end of 2019, Viet Tien’s total consolidated assets were valued at nearly VND4.983 trillion ($216.65 million), up 6 per cent on-year. The capital structure remained safe and the owner’s consolidated equity also rose by 19.5 per cent on-year.

Nevertheless, since early 2020, the COVID-19 pandemic has crossed a great many international orders and caused great shortcomings in material supplies. Moreover, the closure of the three biggest markets (the US, the EU, and Japan) that make up 65 per cent of the local garment export turnover, also domestic firms into a corner.

As a result, VGG was forced to alter its business plans to accommodate these negative impacts and forecast plunges in revenue and pre-tax profit by 30 and 70 per cent, to VND6.3 trillion ($273.9 million) and VND150 billion ($6.5 million) this year.