Truong Thanh Wood (TTF) changed from profit to loss of 144 billion VND after audit

The temporary recording of additional corporate income tax for the 2012-2022 period and fines caused Truong Thanh Wood to report a loss of VND144 billion after auditing, while its self-prepared financial report showed a profit of VND4 billion.

Truong Thanh Wood Industry Group Joint Stock Company (stock code: TTF) has just announced its audited financial statements for 2023 with many changes compared to the previous self-prepared report. The auditing unit is Ernst & Young Vietnam Co., Ltd. (EY).

Specifically, in the self-made report, the company recorded net revenue for the year reaching 1,545 billion VND, but the audit report said the correct figure was 1,560 billion VND. Gross profit according to the company's self-made report reached 258 billion VND, while the audited figure was 253 billion VND. Sales expenses increased by nearly 5 billion VND after the audit, from 120 billion VND to 124.5 billion VND. Business management expenses increased by 14 billion VND, from 116 billion VND to 130 billion VND after the audit.

However, the biggest change was in other expenses, which increased from VND8.5 billion to VND92 billion. This is the main reason why the company reported a profit after tax of VND4 billion on its self-made report, turning into a loss of VND144 billion, while in the same period last year the loss was only VND1.2 billion.

Regarding the sudden increase in costs leading to a huge loss, the audit report stated that in 2023, the Binh Duong Provincial Tax Department conducted a tax inspection at the group of companies for the period 2012-2022 and issued a decision to sanction administrative violations in tax and a decision to recover tax refunds. Accordingly, the group of companies temporarily recorded the additional corporate income tax of previous years with an amount of nearly 32 billion VND. At the same time, the total amount of late payment penalties, administrative penalties and value added tax arrears with an amount of more than 40 billion VND was also accounted for by the group of companies in the other expense account on the consolidated business performance report.

On September 20, 2023 and January 19, 2024, the group of companies sent two official dispatches to the Binh Duong Tax Department to explain the differences with several items that the group of companies did not agree with the inspection results, mainly related to the revaluation of assets and offsetting of loans and interest expenses with Viet A Bank.

The group of companies has requested the Binh Duong Tax Department to review and amend the decisions related to requiring the group of companies to pay additional corporate income tax and late payment interest of nearly VND 18 billion and nearly VND 13 billion, respectively. As of the date of preparing the consolidated financial statements, Truong Thanh Wood has not yet received a response from the Binh Duong Tax Department.

This loss caused the company's undistributed accumulated loss at the end of 2023 to reach VND3,225 billion. The company's equity accordingly decreased sharply compared to the beginning of the period, from VND432 billion to VND267 billion.

According to the audited financial report, by the end of 2023, Truong Thanh Wood had total assets of VND 2,850 billion, a decrease of VND 150 billion compared to the beginning of the period. The company is in debt of more than VND 2,583 billion, of which more than VND 1,517 billion is short-term debt.

TTF shares are currently trading on the stock exchange at 4,410 VND and are experiencing a series of declines for 3 consecutive sessions. With more than 393.5 million listed shares, the company's market capitalization reaches 1,735 billion VND.

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