After review, KLF adjusted down 74% of profit
VietReader 16-08-2020, 14:11

Financial expenses and administrative expenses increased sharply, causing profit after tax in the first half of 2020 to plunge from VND 21.2 billion in self-contained report to VND 5.5 billion in review report. .

In 2019, KLF International Investment Joint Stock Company changed its name to CFS Import and Export Trading Investment Joint Stock Company. Photo: KLF.

According to the reviewed financial report for the first 6 months of the year, CFS Import and Export Trading Investment Joint Stock Company (Ticker: KLF) recorded 910 billion dong of net revenue, unchanged from the self-contained report at the end of July; gross profit also remained at nearly 32 billion dong.

However, financial expenses soared 118%, from 11 billion VND to 24 billion VND, and administrative expenses also nearly doubled to 8.7 billion VND. Therefore, after-tax profit of KLF is reduced by 74% to 5.5 billion.

First half of 2020

Unit: Billion VND

After review

Prior review

Spreads after / before

Net sales

910

912

0%

Gross profit

31,6

31,9

-first%

Gross profit margin

3%

4%

-first%

Revenue from financial activities

12,3

13,3

-8%

Financial expenses

24,3

10,6

129%

Selling expenses

3,7

3,5

7%

Enterprise management expenses

8,7

4,4

96%

Profit before tax

7,0

26,5

-74%

Profit after tax

5,5

21,2

-74%

Net profit margin

0.6%

2.3%

-74%

Currently, the company has not released an official explanation for the reasons why the difference between before and after the review is too large.

According to our research, with the item of Financial expenses, in the self-contained report KLF only recognized VND 10.6 billion of loan interest; while in the reviewed report, the company had to record an additional 13.5 billion dong in provision for capital contribution to another entity.

Specifically, on June 30, KLF has two affiliated companies, Hai Chau Company Limited and FLC Travel Joint Stock Company. The Company assesses that an investment in Hai Chau does not require any provisioning. However, the capital contribution to FLC Travel as at 1/1/2020 had a provision of 8.5 billion VND; by June 30, the number of provisions increased by VND 13.5 billion to approximately VND 22 billion.

Currently, KLF owns 36.6% charter capital of FLC Travel, the original cost of the investment is 109.8 billion dong.

As for General and administrative expenses, according to the notes to the after-reviewed financial statements, the company must record an additional VND 4.2 billion of provision for bad debts, bringing the total value of provisions from 5, 9 billion VND at the beginning of the year to 10.1 billion VND at the end of quarter II.

Most of these bad debts are overdue for more than three years, some from six months to three years overdue. The expected recovery value is only 739 million VND, accounting for 6.8% of the original value.

In 2020, KLF sets a target of 1,200 billion dong in revenue, 36% lower than that of last year, the pre-tax profit target is 15 billion dong. According to self-made financial statements, after 6 months, KLF has exceeded the plan for the whole year by 77%; However, according to the review report, the company has only implemented less than half of its plan.

Compared to the same period last year, KLF’s profit after tax in the first half of 2020 (after review) decreased by 68%.

Source: vietnambiz.vn

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