Fecon profits fell 74% in the second quarter
VietReader 4-08-2020, 23:54

Fecon II net profit plunged 74% due to no longer recording VND 198 billion of other financial income as in the same period last year.

Fecon Joint Stock Company (Code: FCN) has just released the consolidated financial statements for the second quarter of 2020 with net sales of 762 billion dong, up 27% over the same period last year. Thanks to a 21% decrease in COGS, gross profit reached VND 106 billion, up 71% over the same period in 2019.

During the period, other financial expenses decreased by VND 93 billion, helping financial expenses to be reduced from VND 120 billion to VND 30 billion. However, due to no longer recording 198 billion dong of other financial revenue, the financial revenue in the period was only 2 billion dong, down 99% compared to the same period last year.

Along with recording a loss of 4 billion dong from other activities, while the same period still saw a profit of 10 billion dong, Fecon only recorded a profit after tax of 20 billion dong, down 74% compared to the second quarter of 2019. Particularly, the profit after tax of the parent company shareholders was VND 16 billion, down 81% compared to the same period last year.

Fecon profits fell 74% in the second quarter

Source: Thu Thao compiled from Fecon’s second quarter financial statements.

In the first 6 months of the year, the company recorded VND 1,190 billion in net revenue, an increase of 9%, but the after-tax profit decreased by 67% compared to the first half of 2019. The semi-annual net profit margin decreased from 10% to 3%.

In 2020, the company targets revenue growth of 29% to VND 4,000 billion but profit only increases by 10% to VND 233 billion due to lower net profit margin.

At the recent annual General Meeting of Shareholders, Fecon Chairman Pham Viet Khoa said that in the context of fierce competition of the market, the company had to reduce prices to win the bid. The developer prefers to work with Fecon but takes the price of a lower person to force the price.

“I think that not only Fecon but some other businesses will have to accept this in the 2020 period. We are starting to reduce our margins to keep our jobs and markets, and develop our markets further.”

Thus, after half a year, only 30% of revenue and 15% of profit targets for the whole year will be fulfilled.

By the end of the second quarter, Fecon’s assets size reached 5,915 billion Dong, up nearly 5% compared to the beginning of the period. In which, short-term receivables (accounting for 61% of total assets) increased by 8% to 3,634 billion dong.

In the capital structure, liabilities accounted for 59% of the total value of nearly VND 3,449 billion. In particular, short-term debt is 1,000 billion, up 33% over the beginning of the period; long-term debt decreased by 10% to VND 341 billion.

In 2020, Fecon aims to invest VND 128 billion in subsidiaries and associates for construction. Regarding projects, this year the company invested in Soc Trang Wind Power Project (VND 110 billion) and Que Vo Urban Project (Bac Ninh) (VND 63 billion).

In addition, the company plans to privately issue 32 million shares to strategic investors from China – China Harbor Engineering Company Ltd. Issuing price for strategic shareholders is not lower than VND 15,000 / share. The expected proceeds from the private placement of VND480 billion is used to increase subsidiary capital and supplement working capital.

If successful, the strategic shareholder from China will own 20.32% of the company’s charter capital, the largest shareholder in Fecon.

Source: vietnambiz.vn