Truong Thanh Group (TTA) profit drops 23.4%, large long-term debt

Truong Thanh Group's (TTA) Q3 profit drops

In the third quarter of 2023, Truong Thanh Group (Code TTA) recorded revenue of VND 178 billion, down 12.5% over the same period. Gross profit was VND 98.4 billion, down 21%. Gross profit margin also decreased from 61.2% to only 55.3%.

Expenses include: financial expenses accounted for 50 billion VND, down 19.5% over the same period; business management expenses decreased by 8.5%, to 4.9 billion VND; other expenses fluctuated insignificantly.

Truong Thanh Group's profit margin decreased by 234%, long-term debt accounted for the majority of assets, picture 1 — Truong Thanh Group's (TTA) Q3 profit decreased due to unfavorable hydrological conditions (Photo TL)

After deducting expenses, Truong Thanh Group's after-tax profit was 40.2 billion VND, down about 23.4% compared to the same period last year.

Explaining the reason for the decline in revenue and profit after tax, Truong Thanh Group said that unfavorable hydrological conditions caused a decrease in electricity output. In addition, the operation of solar power plants remained stable and did not have many fluctuations.

By the end of the third quarter, Truong Thanh Group's cumulative revenue in 2023 reached VND501.9 billion, down 19.9%. Profit after tax reached VND93.7 billion, down nearly half compared to the same period last year. Compared to the business plan in 2023, Truong Thanh Group has only completed 73% of the revenue plan and 72.1% of the annual profit plan.

Debt accounts for a large proportion of capital structure

In terms of assets, by the end of the third quarter, Truong Thanh Group's total assets reached VND4,450.6 billion, a slight decrease compared to the beginning of the year. Cash and cash equivalents were only VND33.8 billion, a decrease of 2.4 times.

Notably, in the third quarter, there was another short-term receivable, increasing the amount of other short-term receivables to VND 102.4 billion while at the beginning of the year it was only VND 4 billion. Most of Truong Thanh Group's assets are in the form of fixed assets with VND 4,086 billion.

Regarding capital structure, Truong Thanh Group currently has 2,468.8 billion VND in payables. Of which, short-term debt is only 426.9 billion VND, short-term loans and financial leasing debt account for 301.6 billion VND. Long-term debt accounts for 2,041.9 billion VND, most of which is in long-term loans and financial leasing debt, accounting for 1,916.6 billion VND.

TTA's equity reached 1,981.8 billion VND. Accumulated undistributed profit after tax is 281.2 billion VND. It can be seen that the total amount of debt payable accounts for 55.5% of the total current capital of Truong Thanh Group.

Source