Revenue decreased by 81.1% mainly due to the real estate segment's decline, profit decreased by 96.4%
Saigon Telecommunication Technology Joint Stock Company - Saigontel (Code SGT) is a member of Saigon Investment Group (SGI), a private corporation operating in the field of investment and development of Industrial - Urban - Service complexes.
According to the financial report for the first quarter of 2023, Saigontel's business situation is facing many serious problems as both the company's revenue and profit have decreased sharply.
Accordingly, Saigontel's net revenue from sales and service provision in the first quarter reached only VND 64.3 billion, down 81.1% compared to the same period in 2022. Of which, revenue from trade and service activities accounted for VND 48.4 billion, down about 67%.
Saigontel's (SGT) Q1 revenue decreased sharply, especially in the real estate segment, revenue decreased by nearly 92% (Photo TL)
Most notably, real estate business, land, office and factory leasing, saw revenue plummet from VND193.4 billion to only VND15.8 billion, a decrease of 91.8%.
Financial revenue in the period decreased slightly from VND 3.4 billion to VND 3.2 billion. However, it should be noted that financial expenses, mainly interest expenses, remained stable at VND 15 billion despite the significant reduction in revenue and business activities in the first quarter. This corresponds to the fact that despite the reduction in the scale of operations, interest expenses for previous loans have not decreased but are still a burden for Saigontel.
Despite the sharp decline in revenue, the strange thing is that selling expenses nearly doubled, from VND850 million to VND1.4 billion. In addition, business management expenses also increased from VND11.4 billion to VND19.3 billion, corresponding to an increase of 69% compared to the same period last year. This increase has not been clearly explained in Saigontel's Q1 financial report.
Revenue decreased but expenses not only did not decrease but also increased sharply, creating pressure on profits, causing Saigontel's after-tax profit to only 6.8 billion VND, equivalent to a decrease of 96.4%.
Risks increased sharply in asset structure when total debt exceeded equity, new debt of 187 billion arose in the first quarter
At the end of the first quarter of 2023, Saigontel's total assets increased slightly from VND 2,843 billion to VND 3,060.8 billion. However, it should be noted that this increase was mainly recorded from financial indicators on debt.
Saigontel's short-term loans and financial leases as of the end of March 2023 had reached VND1,370.8 billion, an increase of VND166.2 billion compared to the beginning of the year. Notably, in this short-term debt structure, Saigontel's largest debts do not come from banks but from organizations and individuals.
Of which, the three largest debts are the VND329.6 billion loan from Hung Yen Investment and Development Corporation. Next is the VND284 billion loan from Saigon Nhon Hoi Industrial Park Corporation. The VND187.5 billion loan from Duc Hoa Infrastructure Development Investment Corporation, this loan just arose in the first quarter of this year.
Meanwhile, long-term loans and financial leasing debts also increased slightly from VND368 billion to VND395.2 billion. Thus, Saigontel's total short-term and long-term financial debts have reached VND1,766 billion. At the end of the first quarter, Saigontel's equity only reached VND1,659.4 billion. Thus, it can be seen that Saigontel's total loans have exceeded the company's equity.
Inventory accounted for VND1,131 billion, 90% of which was mortgaged in debts.
Another notable point in Saigontel's asset structure is the record of ending inventory accounting for VND 1,131 billion. Although it did not fluctuate much compared to the beginning of the period, it accounted for 1/3 of the company's total asset value.
These are mostly unfinished production and business costs at construction projects that Saigontel is participating in, only a small part is goods. The most notable of these are: The unfinished construction costs of Dai Dong Hoan Son 2 Industrial Park, inventory is up to 470.1 billion VND; The cost of Tan Phu 1 Industrial Park Project, inventory recorded up to 312.7 billion VND.
Although the value of stagnant, poor quality, degraded inventory that cannot be sold during the period is non-existent, according to the financial statements, up to VND 1,023.9 billion worth of inventory is being used as collateral for Saigontel's loans.
Saigontel's asset structure also records a large portion of short-term receivables, accounting for 748.6 billion VND. However, short-term receivables from customers only account for 78.8 billion VND, or only about 10.5%.
Meanwhile, other short-term receivables accounted for 471.8 billion VND. Explaining this part, the company recorded 2 receivables of up to 115.9 billion VND and 83.1 billion VND from 2 individuals, Mr. Nguyen Khac Tai and Nguyen Duy Phong, according to the decisions of the Board of Directors in 2020. These are 2 advances to the above 2 individuals in the payment of compensation for site clearance of the Dai Dong - Hoan Son II Industrial Park Infrastructure Investment and Business Project. Recording this amount in the receivables section means that it is still on paper and has not yet generated money for Saigontel.
During the period, Saigontel also recorded instability in cash flow when net cash flow from operating activities was negative at VND 22.7 billion, showing that the company is lacking cash to compensate for its business activities.
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