Quang Ngai Sugar Joint Stock Company (Code: QNS) has just announced its Q3 business results, continuing to improve with net revenue increasing by 7% year-on-year to VND 2,467 billion. Slow cost of goods sold helped the company achieve a 17% increase in gross profit to over VND 860 billion, corresponding to an improved gross profit margin of 35%.
The company also benefited from the high interest rate environment, with financial revenue more than doubling to VND 92 billion, while sales and administrative expenses were reduced.
As a result, Quang Ngai Sugar Company reported a net profit of VND 506 billion, a 60% increase compared to the same period last year and the highest figure for the third quarter of the year. This figure is only slightly lower than the record profit of the previous second quarter - usually the company's peak business quarter.
The company explained that although the economy had recovered from the Covid-19 pandemic, consumption of products such as milk, mineral water, beer, and confectionery had decreased slightly. The company made efforts to control costs, so the profit margins on these products remained approximately the same as the same period last year.
In addition, some of the company's products maintained stable production and recorded high growth rates, such as sugar, with sales increasing by 85% and revenue by 116%; and electricity, with sales increasing by 35% and revenue by 38%.
Furthermore, the company has invested in developing raw material areas towards industrial production, helping to increase sugarcane productivity; the stable operation of the sugar production line helps lower product costs. State trade protection measures and effective control of smuggled sugar have contributed to the high efficiency of the sugar business.
For the first nine months of the year, Quang Ngai Sugar recorded revenue of VND 7,749 billion and after-tax profit of VND 1,535 billion, representing increases of 23% and 79% respectively compared to the same period last year – both record high figures in the company's history.
Analyzing the structure, the sugar cane segment unexpectedly rose to contribute the largest share of revenue with VND 3,127 billion, but only brought in a gross profit of over VND 862 billion. Meanwhile, the soy milk segment (mainly Vinasoy's Fami brand) contributed VND 3,106 billion in revenue and VND 1,261 billion in gross profit.
| Revenue and Gross Profit Structure of Quang Ngai Sugar Company (billion VND) | Revenue for the first nine months of 2023 | Gross profit for the first nine months of 2023 | Revenue for the first nine months of 2022 | Gross profit for the first nine months of 2022 |
|---|---|---|---|---|
| Road | 3,127 | 862 | 1,449 | 240 |
| Soy milk | 3,106 | 1,261 | 3,390 | 1,416 |
| Thanh Phat | 1,955 | 32 | 1,085 | 30 |
| Other | 1,301 | 307 | 1,261 | 196 |
| Exclusion | -1.741 | -11 | -873 | -8 |
According to the plan set for 2023, QNS shareholders aimed for revenue of 8,400 billion VND and after-tax profit of 1,008 billion VND. With these results, the company has achieved 93% of its revenue target and has already exceeded its profit target by 52%.
As of the end of the quarter, Quang Ngai Sugar's total assets stood at VND 11,214 billion, an increase of 9% compared to the beginning of the year. The majority of this was bank deposits totaling VND 5,621 billion (accounting for nearly half of total assets), which generated over VND 239 billion in interest income for the company after nine months.
Conversely, the company continued to borrow from banks, but only in the amount of VND 1.843 billion, entirely short-term debt. The company had to pay interest equivalent to VND 116 billion, much lower than the interest earned on deposits.
Equity at the end of the period was recorded at VND 7,932 billion; this figure includes the majority of owner's contributed capital of VND 3,569 billion and undistributed after-tax profit of VND 4,129 billion.
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