The break with YouTube keeps dragging Yeah1 (code: YEG) down as the local multimedia platform has just reported millions of US dollars in losses and its stock is in a nosedive.
|Yeah1 recorded VND94 billion ($4 million) in net loss |
Yeah1 saw a sharp fall in profit in the second-quarter due to setting a provision of $3.6 million for selling ScaleLab LLC. Specifically, the company reached VND356 billion ($15.48 million) in net revenue, up 2 per cent on-year. Meanwhile, expenses grew by 57 per cent mainly for advertising and content sharing on digital platforms, which doubled from VND200 billion ($8.7 million) to VND485 billion ($21.1 million).
As a result, its gross margin remained VND13 billion ($565,200), a big drop against teh VND138 billion ($6 million) in the same period last year. However, its revenue from financial activities increased significantly thanks to the interest rate on deposits and lending, which hit VND36 billion ($1.57 million), much higher than the VND1 billion ($43,500) in 2018’s same period.
Thus, Yeah1 reached nearly VND743 billion ($32.3 million) in the first half of 2019’s accumulated revenue and VND94 billion ($4.1 million) in net loss. This is only 37 per cent of the VND2 trillion ($86.96 million) revenue target.
|Yeah1 has just completed the acquisition of more than 1.77 million treasury stocks at the average price of VND79,748 ($3.46). Thus, Yeah1 spent about VND141 billion on the purchase. |
On the other hand, according to Yeah1’s balance sheet, its total assets as of the end of 2019’s second quarter stood at nearly VND1.931 trillion ($83.96 million), including VND690 billion ($30 million) in cash and VND140 billion ($6.09 million) in bonds. Currently, its deposits are used to guarantee loans.
Especially, Yeah1 took up a loan of more than VND231.5 billion ($10.07 million) at ShinhanBank’s branch in Singapore. This USD-denominated loan at the limit of $10 million was carried out to serve the purchase of all stocks of ScaleLab LLC in early 2019 with the interest of 1.15 per cent. The guaranteed assets are its letter of credit for emergency; and the VND275 billion ($11.96 million) deposit at Shinhan Bank Vietnam.
Meanwhile, Yeah1 has increased its short-term loan capital twice, from VND124.5 billion ($5.4 million) to VND278.5 billion ($12.11 million). Its capital remains VND1.38 trillion ($60 million), but the net loss burned all of its after-tax profit, leading to the accumulated loss of VND12 billion ($521,750). In addition, the company reported paid-in capital of VND1.132 trillion ($49.22 million).
Moreover, its stock is doing no better, with its market capitalisation losing hundreds of millions of VND. Currently, its stock is valued at VND75,500 ($3.28), lower than the previous minimum of VND79,748 ($3.46).