Textile and garment group's earnings plummet

Thursday, Aug 20, 2020 06:04

A Vinatex factory. — Photo congthuong.vn

The Viet Nam National Textile and Garment Group (Vinatex) has forecast its total revenue and profit in 2020 will fall significantly from the previous year.

The company expects its total revenue in 2020 will reach VND14.6 trillion (US$632 million), down from last year’s figure of VND20.14 trillion.

Profit is forecast to drop by half to VND381.6 billion from 2019's number of VND765.5 billion.

According to CEO Le Tien Truong, Vinatex has fulfilled half of the year’s total revenue goal but there is still a long way to go to reach the profit target.

Total revenue dropped nearly a quarter year-on-year to VND7.04 trillion in the first six months and profit fell a fifth year-on-year to VND276 billion.

The prolonged US-China trade war has hurt domestic fabric companies, including two that affiliates of Vinatex, the CEO said at the annual shareholders’ meeting on Tuesday.

In addition, the company had no earnings in April as it had to scale down production due to social distancing measures and the spread of the coronavirus, he said.

As the two affiliates have recorded lower earnings than a year before, the benefits Vinatex has in them also decline, he said.

Selling financial investments helped the company offset losses in its core business, the CEO added.

In the six-month period, Vinatex recorded VND69 billion worth of income from selling financial assets, up 25 per cent year-on-year. Its financial expenses were halved to VND88.6 billion from VND174 billion.

In the next five years, market turmoil will keep declining and become more unpredictable and volatile, according to the company.

Vinatex’s expects its earnings will recover and hit the level of 2019’s figures in the middle of the 2020-25 period.

To realise the target, Vinatex will optimise its governance system, improve its competitive competency and build an environmentally-friendly supply chain using 4.0 technologies.

The State-owned garment group also hopes to attract high-quality staff and offer them high salaries and benefits to improve business operation and performance.

Chairman Tran Quang Nghi said average revenue growth was 12.6 per cent per year in the 2015-20 period, average profit growth in the period was 2.5 per cent, and the average cash dividend rate was 5 per cent each year. — VNS

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