Mobile World Investment Corp to lower profit target by 30 per cent

Wednesday, May 20, 2020 15:54

A The Gioi Di Dong store in Binh Thuan Province. The company plans to adjust down revenue by 10 per cent and net profit by 30 per cent this year. — Photo

Mobile World Investment Corporation (MWG) is seeking its shareholders’ approval on plans to adjust down both revenues and net profit this year, citing difficulties caused by the COVID-19 pandemic.

In the documents sent to shareholders before its annual shareholders’ meeting, expected on June 6, the company projects its consolidated net revenue will reach VND110 trillion (US$4.72 billion) by year-end while the after-tax profit is estimated at VND3.45 trillion ($148 million).

These numbers are 10 per cent lower than its initial revenue target and 30 per cent lower than its net profit goal set for 2020. The previous plans were VND122.45 trillion in net revenue and nearly VND4.84 trillion in net profit.

This plan is still a challenge for the company, according to the document, as the disease broke out in the peak period for selling mobile phones and electronic devices following the massive cancellation of sport events, so its two chains – The Gioi Di Dong and Dien May Xanh – will not have many opportunities to improve sales in the second half of the year.

Meanwhile, food and essential consumer goods are still in the expansion stage and have yet to bring in much profit.

The new plan is 8 per cent higher than last year’s revenue but 10 per cent lower than 2019’s profit. In 2019, MWG earned total sales of VND102.2 trillion and net profit of VND3.84 trillion.

This is the first time the company has set a lower profit target than the previous year.

The company’s chairman Nguyen Duc Tai last week told investors that revenue has improved in May but cautioned difficulties ahead, predicting purchasing power would likely decline this year and even next year due to falling incomes of consumers.

In the first three months, MWG reported net revenue of VND29.35 trillion and net profit of VND1.13 trillion. The company has recently updated its business results in April with revenues of VND7.3 trillion, down nearly 20 per cent from more than VND9.1 trillion recorded in 2019’s same month.

In particular, the total sales of The Gioi Di Dong and Dien May Xanh in April decreased by about 30 per cent year-on-year and the company had to close a large number of stores during the social distancing period.

MWG shares have lost about 27 per cent this year, being traded around VND87,000 ($3.73) per share on the Ho Chi Minh Stock Exchange. — VNS

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