Construction Joint Stock Company 1369 (C69) faces a 3.8-fold increase in short-term debt risk in one year.

Construction Joint Stock Company 1369 (C69) has trillion-VND revenue but meager profits.

According to the financial report of Construction Joint Stock Company 1369 (Code: C69), revenue from sales and services reached VND 406.9 billion, more than four times higher than the same period last year. However, the cost of goods sold accounted for a very high proportion, reaching VND 379.1 billion, resulting in a gross profit from sales and services of only VND 27.8 billion, more than double that of the same period despite the four-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 simultaneously from VND 2 billion to VND 9.1 billion. These financial expenses mainly stemmed from interest expenses, amounting to VND 8.7 billion, indicating that Construction 1369 is having to increase borrowing to cover its operating cash flow in 2022.

Construction Joint Stock Company 1369 C69 Short-term debt risk increased by hundreds of billions of dong in one year (Figure 1) — Construction Joint Stock Company 1369 (C69) saw its short-term debt increase 3.8 times, adding hundreds of billions of VND in just one year (Photo: Provided).

Selling expenses also increased from VND 510 million to VND 2.2 billion. Even administrative expenses rose from VND 3 billion to VND 6.6 billion. After deducting all expenses and taxes, Construction 1369's Q4 profit was only VND 13.2 billion, more than double compared to the same period in 2021.

By the end of 2022, Construction 1369's cumulative revenue reached VND 1,047.5 billion, a threefold increase compared to 2021. Despite maintaining revenue growth exceeding VND 1,000 billion, Construction 1369's after-tax profit was rather meager, only VND 28.5 billion, due to the extremely high cost of goods sold and the failure to reduce operating expenses.

Short-term debt risk increased fourfold in just one year.

At the end of Q4 2022, Construction 1369's total assets reached VND 1,366.3 billion, a 52% increase compared to the beginning of the year. Although total assets increased, the increase was mainly in high-risk short-term assets. Cash and cash equivalents, in particular, decreased sharply from VND 71.8 billion to only VND 31.6 billion.

Short-term financial investments also increased from VND 68 billion to VND 207 billion. Short-term receivables also increased sharply from VND 305.9 billion to VND 513 billion. Even more noteworthy is that inventory in 2022 still accounted for a high proportion of total assets, reaching VND 499.7 billion, an increase of 39% compared to the beginning of the year.

The risks for Construction 1369 are further highlighted by the changes in the company's asset structure in 2022. Specifically, liabilities increased sharply from VND 191.8 billion to VND 605.9 billion, equivalent to a threefold increase in just one year.

It is important to note that the increase in debt is mainly short-term debt, amounting to VND 571.1 billion. In addition, short-term borrowings and financial lease liabilities also increased from VND 126.5 billion to VND 481.7 billion. Thus, it can be seen that Construction 1369's short-term debt has increased 3.8 times in just one year.

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

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