State Audit names many businesses with losses of thousands of billions

In 2022, the State Audit Office audited the 2021 Financial Statements and activities related to the management and use of State capital of 219 units belonging to 20 corporations, general companies and companies.

Audit results show that 19/20 production and business units are profitable. The after-tax profit margin on equity at some units is relatively high. In addition, the management and use of capital and assets of enterprises still have some limitations. Many enterprises have suffered heavy losses. According to the State Audit Office, some units have invested ineffectively or with low efficiency. At the Northern Food Corporation (Vinafood1), this unit has 7 subsidiaries and 2 other investments that did not pay dividends in 2021 due to low profits. 8 subsidiaries paid dividends at a rate of 0.69% of the total investment value. Vinafood1 has 9/24 subsidiaries with accumulated losses of 381.86 billion VND. For the Coal and Minerals Group (TKV), the parent company has 3 subsidiaries and 3 joint ventures and associates that have not paid dividends because the profits are not enough to pay dividends or there are accumulated losses. In addition, 3 subsidiaries have accumulated losses of VND 386.84 billion. Of which, 2 subsidiaries are not operating in 2021. One company was established to carry out an investment project but is temporarily suspending investment. Vietnam Cement Corporation (Vicem) has 5/17 subsidiaries with accumulated losses of VND 4,958 billion.

Many state-owned enterprises are operating at a loss and facing cash flow difficulties.

In addition, according to the State Audit Office, some investments of corporations and general companies in joint ventures, associates, and other long-term investments have suffered losses or are likely to lose capital. For example, in the case of the Industrial Park Development Corporation (Sonadezi), 4/22 companies had accumulated losses as of December 31, 2021 of VND 111.61 billion. Vietnam Tobacco Corporation (Vinataba) has 2 investments with accumulated losses of VND 158.67 billion. Vietnam National Shipping Lines (VIMC) has 9 companies and 2 other investments with accumulated losses of VND 15,345 billion. Many other companies with relationships with VIMC also suffered heavy losses. For example, Saigon Port Joint Stock Company has 2 companies with accumulated losses of VND 5,494.16 billion. Of which, one company has negative equity of VND 2,222.43 billion. Ho Chi Minh City State Financial Investment Company (HFIC) has 10 investments with accumulated losses of VND1,111.12 billion. The parent company - Vicem has 3/14 companies and other investments with accumulated losses of VND1,038.16 billion. Similarly, at Ben Thanh Corporation - LLC, 14/32 companies have accumulated losses of VND764.2 billion. The State Audit Office noted that many enterprises show signs of financial insecurity. These are Vicem Tam Diep, Vicem Ha Long, Vicem Song Thao; Ha Bac Food Joint Stock Company, Nam Dinh Food Joint Stock Company, Thanh Nghe Tinh Food Joint Stock Company, Binh Tri Thien Food Joint Stock Company, Luong Yen Food Joint Stock Company, and the Joint Venture Company for Rice Production, Processing and Export. Ineffective cash flow management According to the State Audit Office, some units have ineffective cash flow management. Saigon Cultural Corporation (SCPC) has a bank deposit with a term of 6 months to 1 year. The balance as of December 31, 2021 is 10 billion VND, with an interest rate of 5.5% to 6%/year. Meanwhile, the enterprise has to borrow to cover the shortage of working capital. Short-term loan of 53.96 billion VND, loans with a term of 1 year, with an interest rate of 7% to 8%/year. Many units have not used fixed assets effectively. At TKV, the multi-gravity separation machine cluster is not in use. The flotation - sulfur separation machine cluster at the Sin Quyen Lao Cai Copper Mine Branch - Vimico has not been used for production and business. Hon Gai Coal Company - TKV has a coal screening line using autogenous suspension technology that has not been used since July 2020. The Lao Cai Inland Port Project started implementation in the first quarter of 2009 and generated revenue from 2010. However, from 2017 to 2021, the project's efficiency declined sharply. Production and business activities continuously incurred losses (loss of VND 5.21 billion in 2017, VND 6.10 billion in 2018, VND 6.26 billion in 2019). Audit results also showed that many projects had to stop or delay progress, such as the Vicem Operations and Transaction Center Project, the 122 Vinh Tuy Complex Project, the Concrete Structure Factory Project - Unburnt Construction Materials and the Vicem Port Project in Dong Hoi with construction costs in progress as of December 31, 2021 of VND 773.95 billion; VND 60.06 billion; VND 45.75 billion and VND 2.44 billion, respectively.

In addition, the State Audit Office said that representatives of state capital in some units have not reported promptly and fully to have solutions to remedy loss-making companies according to regulations. The units include Saigon Medical Investment Joint Stock Company, Satra Thai Son Investment Joint Stock Company, Ngoc Dong Food Company Limited; HFIC: Saigon Kim Cuong Joint Stock Company, Thach Anh Electromechanical Joint Stock Company, Him Lam Vietnamese Children's Intelligence Development Joint Stock Company, Labor and Expert Export Service Joint Stock Company, Gia Dinh Textile and Garment Joint Stock Company, Phu Tho Tourism and Trade Service Joint Stock Company, Ho Chi Minh Rubber Joint Stock Company, Saigon Medical Investment Joint Stock Company, Thanh Nien Xung Phong Agricultural Development Joint Stock Company, Phu Hoa Tan Water Supply Joint Stock Company.

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