The Profits of the Second Quarter of 2024 Decreased by 26%, Vinh Hoan Still Has to ‘Bear’ the Loss in the Stock Market.

Vinh Hoan Joint Stock Company (VHC on HoSE) reported consolidated financial results for Q2 2024, with revenue reaching VND 3,196 billion, a 17% increase year-over-year.

Despite the significant revenue growth, a decline in profit margins led to a 20% decrease in gross profit, totaling VND 462 billion.

During this quarter, financial revenue increased by 18% to VND 117 billion, while financial expenses rose by 15% to VND 57 billion. Selling and administrative expenses also increased by 23%, totaling VND 141 billion.

As a result, Vinh Hoan reported a 26% decline in net profit for Q2 2024, amounting to VND 336 billion.

The company attributed the continued profit decline in Q2 2024, despite higher revenue, to a decrease in the selling price of the tra fish product group.

For the first half of 2024, Vinh Hoan recorded a 22% increase in revenue year-over-year, reaching VND 6,051 billion. However, net profit after tax attributable to the parent company was VND 484 billion, a 26% decrease compared to the previous year.

Notably, during the first six months of 2024, the company’s expenses for transportation, storage, and other costs increased by 56%, totaling VND 100 billion.

For the full year 2024, Vinh Hoan has set two business plans: a basic scenario and a high scenario. In the basic scenario, the company targets VND 10,700 billion in revenue, a 6.6% increase year-over-year, and expects a net profit after tax of VND 800 billion, representing a 12.9% decrease compared to 2023.

In the high scenario, the company forecasts revenue of VND 11,500 billion, a 14.6% increase year-over-year, and anticipates a net profit after tax of VND 1,000 billion, an 8.8% increase compared to 2023.

As of the end of the first half of 2024, Vinh Hoan has achieved 60% of its net profit target of VND 800 billion and 48% of its VND 1,000 billion net profit goal for the year.

In terms of asset size, as of June 30, 2024, Vinh Hoan’s total assets increased slightly by 2% from the beginning of the year to VND 12,219 billion.

Inventory accounted for 28% of total assets, valued at VND 3,417 billion. Cash and cash equivalents decreased by 32% to VND 158 billion, while term deposits at banks increased by 21% to VND 2,341 billion over the six-month period. Short-term receivables were recorded at VND 1,765 billion.

Additionally, Vinh Hoan invested VND 161.6 billion in securities, but none of the three stockholdings in the portfolio were profitable, with a total provision of VND 31.4 billion, equivalent to a temporary loss of 19% of the total investment portfolio.

Specifically, the investment in the shares of Dat Xanh Real Estate Service Joint Stock Company (DXS on HoSE) had a original value of VND 60.3 billion, with a provision of VND 27.3 billion. The investment in Nam Long Investment Joint Stock Company (NLG on HoSE) had a original value of VND 83.5 billion, with a provision of VND 1.6 billion. The company also invested VND 15.3 billion in Kinh Bac City Development Holding Corporation (KBC on HoSE), with a provision of VND 1.97 billion. The remaining VND 2.61 billion was invested in other stocks, with a provision of VND 590 million.

On the capital side, Vinh Hoan’s total financial borrowings increased by 6.7% from the beginning of the year to VND 2,410 billion.

Short-term borrowings amounted to VND 2,342.6 billion, an increase of 8.5% mainly due to a significant rise in borrowings from HSBC Vietnam to VND 495 billion and United Overseas Bank (Vietnam) Limited to VND 318 billion.

Long-term borrowings decreased by 34% from the beginning of the year, pertaining to a loan from Vietcombank – Ho Chi Minh City Branch.