Construction Corporation 1369 (C69) short-term debt risk increased 3.8 times in 1 year

Construction Corporation 1369 (C69) has revenue of thousands of billions but profits are meager

According to the financial report of Construction Corporation 1369 (Code: C69), revenue from sales and service provision reached 406.9 billion VND, more than 4 times higher than the same period last year. However, the cost of goods sold accounted for a very high proportion, up to 379.1 billion VND, causing the gross profit from sales and service provision to only reach 27.8 billion VND, more than 2 times higher than the same period despite the 4-fold increase in revenue.

During the period, financial revenue increased from VND 1.1 billion to VND 6.7 billion. However, financial expenses also increased from VND 2 billion to VND 9.1 billion. These financial expenses mainly come from interest expenses, accounting for VND 8.7 billion, showing that Construction 1369 is having to increase debt to offset the cash flow in business operations in 2022.

Construction joint stock company 1369 c69 risk of short-term increase of hundreds of billions of dong in just 1 year picture 1 — Construction Corporation 1369 (C69) short-term debt increased 3.8 times, adding hundreds of billions of VND in just 1 year (Photo TL)

Selling expenses also increased from VND 510 million to VND 2.2 billion. Even business management expenses increased from VND 3 billion to VND 6.6 billion. After deducting all expenses and taxes, the fourth quarter profit of Construction 1369 was only VND 13.2 billion, more than double that of the same period in 2021.

By the end of 2022, the cumulative revenue of Construction 1369 reached 1,047.5 billion VND, 3 times higher than the revenue achieved in 2021. Although maintaining revenue growth of more than 1,000 billion, the after-tax profit that Construction 1369 brought in was quite sluggish, only at 28.5 billion VND due to the extremely high proportion of cost of goods sold and operating costs that have not been reduced.

Short-term debt risk increased 4 times in just 1 year

At the end of the fourth quarter of 2022, the total assets of Construction 1369 reached VND 1,366.3 billion, an increase of 52% compared to the beginning of the year. Although the total assets increased, the increase was mainly in short-term assets with high risks. In which, cash and cash equivalents decreased sharply from VND 71.8 billion to only VND 31.6 billion.

The index for short-term financial investment also increased from 68 billion VND to 207 billion VND. Short-term receivables also increased sharply from 305.9 billion VND to 513 billion VND. More notably, the index for inventories in 2022 still accounts for a high proportion of total assets, up to 499.7 billion VND, an increase of 39% compared to the beginning of the year.

The risk to Construction 1369 is even more clearly demonstrated in the change in the asset structure of this unit in 2022. Accordingly, the payable debt has increased sharply from 191.8 billion VND to 605.9 billion VND, equivalent to a 3-fold increase in just 1 year.

What needs to be noted here is that the increased debt is mainly short-term debt with 571.1 billion VND. In addition, the index of short-term loans and financial leasing debt also increased from 126.5 billion VND to 481.7 billion VND. Thus, it can be seen that the short-term debt source of Construction 1369 has increased 3.8 times in just 1 year.

Meanwhile, long-term debt tends to decrease slightly from 40 billion VND to only 34.8 billion VND. Owner's equity accounts for 760.4 billion VND, which is only about 154.5 billion VND higher than the company's short-term debt. This is also a signal that the risk in C69's capital structure has increased significantly in 2022. The company's recorded undistributed profit after tax is only 46.5 billion VND, relatively low compared to the size of C69's equity.

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