Net income explodes by 42x year-over-year, highest since Q4 2022
Ending the first quarter of 2024, MWG brought in over VND 31.4 trillion in net revenue, a 16% increase compared to the same period last year, fulfilling 25% of the annual plan.
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According to the recently released quarterly business update report by MWG, the Mobile World chain, which includes TopZone (TGDĐ) and Dien May Xanh (ĐMX), generated a total revenue of VND 21.3 trillion, representing a 7% increase. The main driver was the home appliance segment, with double-digit growth, particularly air conditioners, which saw a surge of nearly 50%.
MWG also reported a significant improvement in gross profit margin for both chains. Key operational efficiency and absolute profit indicators have shown positive changes after six months of intensive restructuring efforts.
The Bach Hoa Xanh (BHX) chain even grew by 44% to over VND 9.1 trillion, or an average of VND 1.8 billion per store per month. The growth momentum was driven by both fresh food and FMCG categories. BHX continues to maintain its breakeven point after all expenses, reflecting its operational efficiency.
Finally, MWG‘s after-tax profit reached VND 903 billion, more than 42 times higher than the same period last year, fulfilling 38% of the annual plan. Net profit was over VND 902 billion. This is also the highest level of net profit for MWG since Q4 2022.
| MWG‘s net income in recent quarters |
As of March 31, 2024, MWG‘s total asset value exceeded VND 63.5 trillion, a 6% increase compared to the beginning of the year. Most of this is recorded as short-term financial investments, close to VND 24.7 trillion, a 30% increase, primarily comprising time deposits in VND at commercial banks with terms ranging from three months to less than a year, as well as other investments. The inventory reached nearly VND 20.5 trillion, a 6% decrease, predominantly consisting of electronic devices, mobile phones, laptops, home appliances, dry and fresh food, beverages, and consumer goods, including cosmetics and personal care products.
On the other side of the balance sheet, MWG has VND 37.5 trillion in liabilities, a slight increase compared to the beginning of the year, accounting for approximately 60% of total equity. Total borrowings amounted to VND 23.7 trillion, a 6% decrease.
Continued workforce reduction
According to the recently announced financial statements, MWG reported that the Group’s employee count as of March 31, 2024 was 60,561, a reduction of 4,853 employees compared to the end of 2023. Compared to the end of Q1 2023, MWG has cut its workforce by 7,487 employees in just one year.
Regarding the number of stores, according to the business update report for the first three months of 2024, MWG currently operates a total of 5,596 stores, including 1,071 TGDĐ stores, 2,184 ĐMX stores, 1,696 BHX stores, 526 An Khang pharmacies, 64 Ava Kids stores, and 53 EraBlue stores.
Since the beginning of the year, TGDĐ, ĐMX, BHX, and An Khang chains have all seen a decline in the number of stores compared to the beginning of the year. Ava Kids remained unchanged, while the EraBlue chain experienced significant growth. Compared to the same period last year, the number of stores, particularly in the TGDĐ and ĐMX chains, has decreased substantially, following a challenging business environment for the industry and MWG‘s comprehensive restructuring efforts.
Source: Compiled by the author
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MWG‘s restructuring strategy has been a hot topic in recent times, with the company’s Chairman, Mr. Nguyen Duc Tai, sharing his insights at the 2024 Annual General Meeting: “The restructuring process is not a one-time event that disappears. Instead, it will become a new culture that occurs every six months or annually. MWG will repeat this process to ensure there is no redundancy and retain only what is effective to make the organization leaner and stronger.”
