Many enterprises lost for the first time due to Covid-19

Stopping operation caused the Western Bus Station to suffer its first loss after more than ten years of listing. Source: Internet

First time reporting a loss

The Southern Rubber Industry Joint Stock Company (Casumina) said that the Covid-19 pandemic in the southern provinces had impacted the company's sales, and its circulation of goods decreased sharply. As a result, the company's revenue in the third quarter of 2021 decreased by 21% compared to the same period in 2020, to only VND1,033 billion. Output was affected, input also struggled because the cost of input materials and the cost of importing materials increased.

To ensure production output, the company implemented "3 on the spot" production, so the cost increased. Therefore, the ratio of price to sales of the company increased from 80% in the third quarter of 2020 to 92% in this quarter.

As a result, Casumina lost more than VND28 billion in the third quarter of 2021 – the first loss since the company started listing in 2009.

Casumina's operating cash flow also recorded a negative level at nearly VND475 billion at the end of September 2021. This is due to a sharp increase in inventories and short-term receivables. In which, the company's inventory value increased by nearly 22%, to VND1,625 billion.

In a recent meeting with securities analysts, the management of Binh Minh Plastics Joint Stock Company shared a loss after tax of VND26 billion in the third quarter of 2021, the first loss in the company's history.

Accordingly, revenue in the period decreased by 53% due to a 59% decrease in consumption volume compared to the same period in 2020 due to social distancing in most Southern provinces. Binh Minh Plastics factories only operated at 20-30% capacity during the locked down period, low operating efficiency increased production costs per product unit. In addition, the administrative costs associated with "3 on the spot" also negatively affected profits.

The social distancing measures in Southern provinces and cities also caused the consumption volume of Ha Tien Cement Joint Stock Company to decrease sharply in the third quarter of 2021. Specifically, the volume of cement consumption in the period decreased by 55%, causing the revenue to decrease by 48%, to VND1,039 billion. In addition, the prices of main raw materials for cement production such as coal, oil, and gypsum all increased sharply while the company had not been able to increase the selling price of cement. As a result, Ha Tien Cement suffered a net loss of VND20 billion in the third quarter of 2021 – the company's first loss in the past eight years.

Not only manufacturing enterprises, but also units in the medical field did not escape losses under the impact of the Covid-19 pandemic. Specifically, Tam Duc Heart Hospital Joint Stock Company has just recorded the first quarter of loss after four years of listing shares on the stock exchange. Specifically, the revenue of this enterprise decreased to only a third, although it had cut staff salaries, it still could not cover other costs. In addition to the high fixed costs, there were also expenses incurred for the means of protection and disinfection.

Accordingly, Tam Duc Heart Hospital had a net loss of VND13 billion in the third quarter of 2021. According to Doctor Do Van Buu Dan, General Director of the hospital, the financial situation was still very difficult, it was expected that 2021 would only reach 20% of the operating results in 2020.

Freezing due to social distancing

The implementation of social distancing to prevent the Covid-19 pandemic in many localities during most of the third quarter of 2021 has caused the production and business activities of many enterprises to fall into a state of "freezing".

For example, at Phu Nhuan Jewelry Joint Stock Company (PNJ), most of the business stores had to temporarily close in the third quarter of 2021 according to regulations on social distancing, especially in Ho Chi Minh City. This caused net revenue of the period to decrease by 78%, reaching only VND877 billion, while net profit after tax was nearly VND160 billion, this has been also the first quarter of PNJ having negative profit result since listing on the HoSE stock exchange in 2009.

Western Bus Joint Stock Company also had the first loss after more than a decade of listing, with a net loss of more than VND7 billion in the third quarter of 2021. According to the company's management, the cause of this loss was due to the Covid-19 pandemic when the company had to stop operating and only kept two-wheel vehicles and collected vehicle service fees for entering and leaving the cargo terminal.

In addition to the above-mentioned cases, the financial reporting season of the second quarter of 2021 also saw record losses in the operating history of many enterprises. Specifically, Hang Xanh Automobile Service Joint Stock Company (Haxaco) had two branches in Ho Chi Minh City which must close during the third quarter of 2021 and two branches in Hanoi which also closed until September 21, 2021 have opened business back.

Accordingly, all of Haxaco's business activities were frozen during this period. While the company still had to bear the costs of depreciation, payroll and other fixed costs during the closure. Accordingly, Haxaco has had a net loss of VND33 billion - a record quarterly loss since the company was listed on the stock exchange.

Similarly, many other enterprises also recorded quarterly losses such as Chuong Duong Beverage Joint Stock Company with a loss of VND18 billion, Construction Joint Stock Company No. 9 (Vinaconex 9) with a loss of VND76 billion.