Mobile World's profits "evaporated" by 98% in the first quarter
Mobile World Investment Corporation (MWG Code) has just announced its consolidated financial report for the first quarter of 2023, recording the lowest profit level in the past decade.
In particular, Mobile World's first-quarter revenue reached VND27,105 billion, down 27.5% year-on-year. Profit after tax in the period was only VND21.2 billion, down 98% compared to the same period in 2022.
During the period, financial revenue did not fluctuate much, only increasing slightly by 4.2 billion VND, to 359.1 billion VND. Meanwhile, financial expenses increased by 43.4% to 295.8 billion VND.
Mobile World's first quarter profit dropped by 98%, the lowest in the past decade (Photo TL)
On the other hand, total sales and administrative expenses decreased by 18.6%, to only VND5,109.4 billion. After deducting expenses and taxes, Mobile World's remaining after-tax profit was VND21.2 billion.
Compared to the 2023 business plan target of Mobile World with revenue of VND 135,000 billion, an increase of 1% compared to the previous year, the expected profit after tax is VND 4,200 billion, an increase of 2%. It can be seen that currently MWG has only completed 20% of the revenue plan, the profit plan is even slower, only reaching 2% of the set target.
The fact that after-tax profits plunged by 98% in the first quarter of this year has taken investors by surprise, although the difficult business situation of enterprises in general in the current economic conditions was predictable.
Even compared to the business results achieved in the past 10 years, this is the first time Mobile World has recorded such low after-tax profit results.
At the recent annual general meeting of shareholders, the leaders of Mobile World Investment Corporation also acknowledged the difficult business situation. In particular, the impact of the economy has affected purchasing power and caused the revenue of the two chains Mobile World and Dien May Xanh to decrease.
Halving cash dividends, not paying stock dividends, closing chain of stores in Cambodia
It can be seen that Mobile World's difficult business situation has begun to appear since 2022.
In 2022, Mobile World encountered some business difficulties when the whole year's revenue only reached 133,404.8 billion VND, an increase of 8.5% compared to 2021. However, profit after tax decreased from 4,901.4 billion VND to only 4,101.7 billion VND, a decrease of about 16.3%.
The poor business situation this year was even more evident when Mobile World had to close all stores in the Bluetronics chain in Cambodia.
This is a chain of stores selling phones and electronics that has been operating since 2017 with the first store located in the capital Phnom Penh called BigPhone. In 2019, the chain changed its name to Bluetronics. To date, all 55 stores have closed, with only 2 stores remaining in the capital Phnom Penh.
With business difficulties, it is not difficult to understand why Mobile World has to halve its cash dividend and not pay stock dividends in 2023.
It is worth mentioning that despite the difficulties in 2022, Mobile World still issued ESOP shares to reward employees. Last year, Mobile World also issued an additional 19.2 million ESOP shares for the company's key management staff.
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