VNG reveals increased losses

May 31, 2023 | 09:57
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VNG's 2022 financial report shows significant losses amidst rising expenses.
VNG reveals increased losses

VNG Corporation has recently unveiled its audited separate and consolidated financial statements for 2022, which were conducted by EY.

The audit report has shed light on detailed information, particularly concerning the tax-deductible loss incurred by Zion JSC, a subsidiary of VNG with a 69.98 per cent ownership stake.

Established in 2005, Zion operates ZaloPay, a mobile payment application developed to meet both personal and business payment needs.

Alongside Momo, AppotaPay, VNPay, and other competitors, ZaloPay has gained significant popularity and boasts a loyal user base. VNG has reported that ZaloPay has established partnerships with 39 banks and over 5,000 partners, with a remarkable 51 per cent monthly user activity growth throughout 2021.

According to information available on the ZaloPay website, the e-wallet has successfully collaborated with renowned banks including Vietcombank, VietinBank, Sacombank, BIDV, Eximbank, SCB, BVBank, and international card organisations such as Visa, Mastercard, and JCB.

Despite its extensive coverage, ZaloPay, along with its other business segments, has struggled to generate profits for Zion. The company has faced five consecutive years of losses from 2017 to 2021, and this trend continued into 2022 with a substantial tax-deductible loss of almost $57 million.

During 2022, VNG's ownership in Zion experienced an increase from 60 per cent at the beginning of the year to just under 70 per cent by the end.

Another noteworthy investment activity undertaken by VNG in the past year was the complete acquisition of Verichains, a software production company headquartered in Ho Chi Minh City. VNG purchased 100 per cent ownership from existing shareholders, with the total transfer value amounting to $6.9 million.

This acquisition demonstrates VNG's commitment to expanding its portfolio and diversifying its business interests. By fully acquiring Verichains, VNG has solidified its position in the software production sector, paving the way for potential synergies and growth opportunities.

Following the audit statement, VNG's consolidated loss for 2022 reached $66.7 million. The company clarified that the discrepancy was primarily due to the recognition of additional expenses related to taxes, intangible fixed assets, and provisions for financial investment activities.

As of December 31, 2022, the audited consolidated total assets of the VNG Group amounted to approximately $387 million.

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By Lam Tien

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