Revenue plummeted 88.9%, Gilimex (GIL) suffered a record loss in the first quarter since its listing
Binh Thanh Import-Export Production and Trading Joint Stock Company - Gilimex suffered heavy losses when its partner Amazon suddenly stopped a large order. Currently, the company's business results on the Financial Report for the first quarter of 2023 are also recording a record loss of up to 39 billion VND.
Specifically, in the first quarter of 2023, Gilimex recorded net revenue of VND 156.9 billion, a plunge of 88.9% compared to the same period last year. Not only that, the business situation below cost price also caused the company to record a gross loss of VND 4.26 billion from its main business activities. This means that Gilimex is in a situation where the more it does business, the more it loses.
Recording business results in the first quarter of Gilimex (GIL), revenue decreased sharply, record loss of nearly 40 billion VND after 21 years. (Photo TL)
Financial revenue in the period reached 27.4 billion VND, down 26%. Financial expenses decreased from 28.6 billion VND to only 16.4 billion VND. Meanwhile, selling expenses decreased sharply from 67.2 billion VND to only 1 billion VND, while business management expenses remained stable at 42.3 billion VND.
Revenues have declined, and expenses have been cut but are still putting pressure on profits. During the period, Gilimex's after-tax profit was negative VND38.6 billion. This is the highest loss the company has ever recorded since its listing in 2002.
According to the explanation from Gilimex company, the main reason for the loss is the difficult economic situation, the sharp decrease in orders has also affected the company's revenue.
In addition, the company is also in the process of focusing on building infrastructure for real estate projects to hand over land to secondary investors in the second quarter, so general operations in the real estate sector of industrial parks will be recorded in the following quarters.
With the revenue achieved in the first quarter, compared with the 2023 business plan with revenue of VND 1,500 billion, pre-tax profit of VND 103.5 billion, down 77.4% compared to the implementation in 2022, the company has only completed 1/10 of the revenue plan and is still behind the set profit plan.
Losing a big order with Amazon, Gilimex is suing for compensation
In 2022, Gilimex was noticed when Amazon canceled a long-term agreement to purchase raw materials and produce according to the partner's orders. To serve this agreement, Gilimex invested a large amount of money to expand the factory before the cooperation was terminated.
Gilimex has said it has invested tens of millions of dollars in production facilities, built warehouses, and hired more than 7,000 employees for factories that produce products ordered from Amazon.
By May 2022, Amazon had predicted a sudden drop in demand in the international market, so it suddenly reduced its orders with Gilimex to a very small amount. This caused Gilimex to suffer heavy losses due to its previous large investment of resources to expand its business.
Accusing Amazon of suddenly reducing the size of orders, causing the company to suffer heavy losses, Gilimex sued Amazon for compensation of 280 million USD.
Also from April 2022 onwards, GIL stock price has dropped sharply from VND 74,250/share to only VND 22,400/share in the trading session on May 4, 2023. Correspondingly, GIL stock price has decreased 3 times in just 1 year after the above incident.
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