This year, ABC will allocate VND 10.1 billion of its post-tax profit from 2023 as dividends to shareholders, at a rate of 5% (1 share receives VND 500). The expected payment date is September 27, 2024. Personal income tax will be withheld at source in accordance with the law.
Regarding the lawsuits that have interrupted ABC‘s dividend payments to shareholders in recent years, the company resumed dividend payments last year due to a surge in profit in 2022, with a payout ratio of 15%, equivalent to nearly VND 30 billion. In the past, ABC once allocated VND 396 billion (195% payout ratio) as dividends for the year 2017.
At the 2024 Annual General Meeting of Shareholders, Board Member Nguyen Thanh Hai, representing the interests of Vietnam Posts and Telecommunications Group (VNPT), expressed the view that a 5% dividend payout ratio is unreasonable. However, ABC‘s Chairman, Nguyen Hoang Nam, justified the rate, stating that when compared to current bank interest rates, it is acceptable, especially considering the challenges faced by many businesses in various industries. He assured that the company will fulfill shareholders’ expectations once its business operations are back on track.
ABC’s dividend history. Source: VietstockFinance
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| ABC’s dividend payout for the period 2006-2023 |
The first half of 2024 has not been favorable for the telecommunications company, with revenue reaching only VND 363 billion, a 21% decrease compared to the same period last year. Revenue from service provision halved to VND 89 billion. Operating at a gross loss, ABC incurred a negative gross profit of VND 3.6 billion.
Selling expenses and administrative expenses increased significantly, by 1052% and 56% respectively, amounting to VND 2.6 billion and VND 13 billion. This surge in expenses can be attributed to increased spending on advertising and outsourced services.
A bright spot was the financial performance, with revenue of VND 22 billion, nearly double that of the first half of the previous year, mainly due to gains from sales on credit, and payment discounts. Financial expenses, including interest expenses, decreased by half to nearly VND 800 million. ABC recorded a net profit of nearly VND 1 billion, a disappointing 75% decrease, the worst performance since 2009.
According to the company, the overall situation in the telecommunications market, including the performance of other network providers, has impacted ABC‘s traditional revenue streams.
For the full year 2024, ABC targets revenue of VND 1,100 billion and a pre-tax profit of nearly VND 29 billion. However, after the first half, the company has only achieved approximately 31% and 4% of these targets, respectively. The projected dividend payout ratio for 2024 remains at 5%.
As of the end of June 2024, ABC‘s total assets were approximately VND 641 billion, largely unchanged from the beginning of the year. Over half of this amount, VND 359 billion, was accounted for by short-term receivables from customers, an increase of VND 20 billion. Cash and cash equivalents increased by VND 31 billion to VND 118 billion.
The company’s total liabilities were VND 147 billion, mainly due to a provision of VND 80 billion, unchanged from the previous six months. This provision represents short-term payables for tax obligations to two South Korean companies, Global Payment Service (GPS) and UTC Investment (UTC), based on their compensation claims.
| ABC’s financial results for the first half of 2009-2024 |
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