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Tuesday, June 25, 2024

TCM’s net earnings in Q2 plummet by 97%

The Saigon Times

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HCMC – Thanh Cong Textile Garment Investment Trading JSC (TCM) incurred a sharp drop in its financial performance in the second quarter of 2023, with its net profit plummeting by a staggering 97%.

Its revenue in the quarter decreased by 32% year-over-year at VND715 billion, leading TCM to struggle to maintain profitability. The company’s quarterly earnings were the lowest since the fourth quarter of 2021.

For the first half of the year, TCM’s total net revenue stood at nearly VND1.6 trillion, down 27% from the year-ago period.

During this period, its net profit plunged by a substantial 56% year-on-year to just over VND56 billion. This significant profit fall also implies that the company has achieved only 23% of its annual profit target of VND245 billion, signaling a tough road ahead for the management board to steer the company back on track.

Under the current circumstances, TCM faces uncertainty as it struggles to secure adequate orders for the third quarter. Currently, the company has only managed to have orders for fulfilling 76% of its third-quarter revenue target and 86% of its fourth-quarter revenue target.

The lack of full capacity operations and the shortage of orders pose significant hurdles for TCM’s financial recovery in the near future.

With exports accounting for 87% of the company’s revenue, TCM primarily focused on Asian markets, followed by the U.S. and Europe. However, the ongoing challenges in international trade have impacted TCM’s export performance, contributing to its declining financials.

As of June 30, the company saw a 4% decline in total assets compared to the beginning of the year, at over VND3.3 trillion. Its cash reserves sharply dropped from VND180 billion to VND30 billion. In contrast, investments held until maturity rose by nearly half to reach almost VND308 billion.

TCM’s inventory remained stable throughout the period, with VND1.2 trillion worth of inventory and a provision of VND35.5 billion set aside for potential risks.

At the close of today’s trading session on July 24, TCM shares extended their losing streak for the fifth consecutive session, experiencing a decline of 0.57% and ending at VND52,700 per share.

With the number of winners doubling that of losers by 301 to 154, the VN-Index of the Hochiminh Stock Exchange added 4.82 points, 0.41% higher than the previous session, to 1,190.72 points.

Trade on the bourse improved around 5.57% in volume and value, with more than one billion shares worth over VND20 trillion changing hands. There were 54.3 million shares being transacted through block deals, contributing over VND1.3 trillion to the overall value.

Housing developer NVL stole the limelight today as it shot up to its daily upper limit and finished the day at VND16,200 per share. NVL also took the lead by liquidity with more than 95.9 million shares matched, nearly tripling the second most actively traded shares – DIG with 33.7 million shares traded.

On the northern bourse, the HNX-Index gained 1.55 points, or 0.66%, to 236.53 points, with 104 advancers and 75 decliners.

There were 126.5 million shares valued at VND2 trillion changing hands on the northern market.

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