SCD (Song Cuong Beverage Joint Stock Company) recently released its Q1/2024 financial report, revealing a revenue of 56.8 billion VND, which is an 11% decrease compared to the same period last year.
Chương Dương’s financial activities revenue increased 10-fold compared to Q1/2022, reaching over 1.1 billion VND, mostly from interest on deposits, loans, and dividends.
However, these increases were not enough to offset the company’s losses as financial expenses increased by 2.5 times to 9.9 billion VND. Additionally, sales expenses rose by nearly 65% compared to the same period last year.
As a result, after deducting expenses, Chương Dương reported a post-tax loss of nearly 17 billion VND, while the loss in the same period last year was only 2.7 billion VND. This marks the company’s 13th consecutive quarter of losses. However, this quarter’s loss has decreased significantly compared to the previous three quarters.
SCD stock price trend over the last 3 months. Source: Fireant
Explaining the loss, Chương Dương’s management stated that they continue to face rising costs for raw materials such as sugar and aluminum due to ongoing economic challenges, including lower domestic consumption as consumers tighten their belts.
Additionally, the company’s performance in Q1 was lower compared to last year due to higher land lease costs and interest expenses.
As of the end of Q1/2024, Chương Dương had financial loans and debts of nearly 610 billion VND. Cash and bank deposits were around 27 billion VND.
Earlier this month, the Ho Chi Minh City Stock Exchange (HOSE) announced the delisting of SCD shares from May 6. The reason is that the company has made losses for three consecutive years, with total accumulated losses exceeding its contributed charter capital and negative equity in the latest audited financial statement prior to the review.
Following the delisting news, SCD’s stock price plummeted, but has recently shown signs of recovery. At the close of trading on April 22, SCD’s share price closed at VND 12,950. Compared to a month ago, the stock has decreased by almost 11%, and by almost 14% since the beginning of the year.
Chương Dương was formerly the Usine Belgique factory belonging to the B.G.I Group (France) and was the largest soft drink factory in the South during the last century.
At that time, Chương Dương was a leader in the soft drink industry in the South and was famous for its “tiger sasi” product. Tiger sasi water was considered a fashionable drink, winning the hearts of consumers of all ages thanks to its unique flavor.
In those days, an average small retailer could sell hundreds of thousands of products per month. However, since the market has seen the emergence of many foreign soft drink brands such as Coca-Cola and Pepsi, Chương Dương’s “tiger sasi” soft drink has quickly lost market share.
