Business results suffer from securities investments in Q2

Tuesday, Jul 26, 2022 09:00

An APS employee talking to a customer at the securities firm's office. — Photo

As the financial report season begins, besides companies announcing large profits with strong growth, many saw great losses in the second quarter of 2022.

Of those already released business results, there were 12 enterprises reporting losses. And among these companies, eight are securities firms.

APEC Securities JSC (APS) suffered the most after recording a loss before tax of VND442 billion (nearly US$19 million) in the second quarter. For the first half of the year, its accumulated losses were VND384 billion.

The results were mainly due to the strong volatility of the stock market affected by negative news, hitting the proprietary trading activities of securities companies.

The re-evaluation of financial investments caused securities firms’ proprietary trading activities to lose hundreds of billions of dong, dragging down business results.

In the first six months, only three securities companies were still profitable – Saigon - Hanoi Securities SJC with VND39 billion, TP Securities saw a profit of VND59 billion and APG Securities VND2 billion.

Licogi 14 (L14) and Da Nang House (NDN) are two real estate companies, but they spend quite a lot of capital on securities investment.

When the market was in a good phase in 2021, both L14 and NDN made good profits.

However, in the second quarter of 2022, as the market dropped sharply, investment in securities was attributed to these two’s losses.

Revenue from financial activities of L14 in this quarter was just over VND7 billion, but financial expenses amounted to more than VND402 billion. Thereby, its financial segment made a gross loss of more than VND390 billion.

As a result, L14’s loss before tax in the second quarter was VND367 billion. For the first half of 2022, the company’s loss before tax was VND227 billion.

Similarly, the volatility of the stock market caused a sharp drop in profit from the investment of NDN, with financial revenue also falling by more than 81 per cent over the same period in the second quarter. Moreover, as it had to create provisions for the securities investment portfolio, NDN’s financial expenses surged.

Therefore, NDN suffered a heavy loss of more than VND120 billion in the second quarter of this year while it saw a profit of VND105 billion in the same period last year. Accumulated for the first six months, NDN lost VND91 billion.

NSH Petro and Nosco also suffered losses due to operating below cost.

Of which, NSH Petro lost VND302 billion in the second quarter and VND295 billion for the first half of 2022.

Meanwhile Nosco, after recording a profit in the fourth quarter of 2021, lost once again in the first quarter of 2022.

In the second quarter, it posted a loss of VND86 billion and lost VND116 billion for the first six months. Notably, Nosco's profit in the fourth quarter of last year also came from financial activities, while its main business still suffered a loss. —VNS

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