Owner of Everon bedding brand narrows production of one product line

Everpia Joint Stock Company (stock code: EVE) decided to reduce production and business of towel industry due to operating losses.

The Board of Directors of Everpia Joint Stock Company passed a resolution to reduce production and business of towel industry, and at the same time develop a recovery plan for next year.

Everpia’s management board said that the towel industry is currently facing many challenges due to fierce competition in the market. Over the past 3 years, sales of this industry have continuously decreased as customers tend to look for competitors with lower prices. This industry contributed 21.2 billion VND to the company’s total net revenue in the first half of the year, or about 6.3%. Revenue in the first half of the year decreased by 40% compared to the same period last year.

“This decline not only affected revenue, but also extended operating losses, making the towel business one of Everpia’s main weaknesses,” the company document said.

Management added that despite efforts to improve production processes, negotiate with suppliers and control costs, the cost-to-sales ratio has always been around 90%. Therefore, continuing to maintain this line of business would negatively affect the company's overall development.

During the initial phase of the shutdown, the company will retain the necessary machinery to complete existing orders. The company will then gradually sell off the surplus machinery. The remaining value of all machinery related to the towel factory is VND4.2 billion.

The company also plans to assign employees to appropriate workshops or departments, and implement training programs to help employees quickly transition and adapt to new positions. In addition, Everpia offers incentive packages or severance pay to ensure minimal disruption to operations.

The company launched a marketing and sales campaign to clear existing inventory and resell it to distributors at competitive prices.

The board of directors said the decision would result in a large loss for the company in the third quarter of 2024, despite the fact that its bedding and bath products are still performing well. The company expects improved profits from the fourth quarter of 2024.

In the period of 2024 - 2025, Everpia plans to promote annual revenue growth by expanding domestic and international markets and promoting bedding production. In addition, the company expects to reduce the proportion of cost of goods sold, optimize sales and business management costs.

In the first half of 2024, Everpia achieved net revenue of VND336 billion, a slight decrease compared to VND349 billion in the same period last year. The company reported a loss after tax of VND7.6 billion, while in the same period last year it made a profit of VND10.7 billion. This is the first time Everpia has recorded a loss in 6 months of business operations.

This year, the company plans to earn VND1,000 billion in revenue, up 27% over last year. After-tax profit is VND60 billion, 3.3 times higher than the same period last year. After half a year, the company has completed 33.7% of its revenue target and is still far from its profit plan.

As of the end of the second quarter of 2024, Everpia had total assets of VND1,310 billion, a slight decrease compared to VND1,356 billion at the beginning of the period. Liabilities were over VND340 billion, most of which were short-term debts. Owners' equity was approximately VND970 billion, and undistributed profit after tax was over VND353 billion.

On the stock exchange, EVE shares are currently at VND11,300. Compared to the price range at the beginning of the year of VND15,150, this code has decreased by 25.4%. The matched volume in the last 10 sessions is more than 93,000 units. The market capitalization is more than VND474 billion.

Source: https://baodautu.vn/chu-thuong-hieu-chan-ga-everon-thu-hep-san-xuat-mot-nganh-hang-d226316.html