Illustration: Wuling Mini EV electric car distributed by TMT Motor
TMT Motor Joint Stock Auto Company has recently released its semi-annual audited financial report, revealing a 13.4% decline in revenue compared to the same period in 2023, totaling VND 1,323 billion. Additionally, the company incurred a loss of nearly VND 100 billion in the first half of the year.
In the audited financial statement, UHY Audit and Advisory Limited Company emphasized their doubt about the company’s ability to continue as a going concern. They stated, “In the first six months of 2024, TMT Motor recorded a loss of VND 98.97 billion, and as of June 30, 2024, its short-term debt exceeded short-term assets by VND 120.7 billion. These events, along with the issues described in notes 38.2 and 38.3, indicate the existence of a material uncertainty that may cast significant doubt on the company’s ability to continue as a going concern.”
According to the notes, TMT Motor mentioned that in the second quarter of 2024, to ensure liquidity and reduce borrowing costs, the company had to lower prices to clear inventory. Additionally, they reduced personnel, cut costs, and decided to restructure their product lines, aiming for better new products.
The company also plans to dispose of fixed assets and investments and recover receivables to supplement their business capital and repay debts.
TMT Motor expects to be able to repay its maturing debts and continue operations in the next accounting period. In the first half of 2024, the company reduced its workforce by 140 employees, from 589 to 449 people (a 23.8% decrease in personnel).
In terms of business performance, TMT Motor experienced a 13.4% decline in revenue in the first half of 2024 compared to the same period last year, totaling VND 1,323 billion. The company reported a post-tax loss of nearly VND 99 billion, while in the previous year, they made a profit of VND 1.18 billion. Notably, the gross profit margin decreased significantly from 8.5% to just 0.7%.
TMT Motor attributed the primary reason for this performance to the challenging economic conditions faced in 2024, which impacted both the economy and businesses. The economic recession, frozen real estate market, significant reduction in public investment, inflationary pressures, and consumers’ tight spending led to a sharp decline in car sales, despite continuous price reductions by automobile manufacturers and distributors to clear inventory.
TMT Motor is currently the distributor of the Wuling Mini EV electric car in Vietnam. In July, TMT Motor announced price adjustments for the 120 km and 170 km range versions of the Wuling Mini EV. Specifically, the LV2-120 is priced at VND 197 million, and the LV2-170 is VND 231 million. In contrast, the VF3 is priced at VND 240 million. Thus, TMT Motor currently distributes the most affordable electric car in the Vietnamese market.
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