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Vinatex projects 50% drop in profit before tax this year

Jun '20
Pic: Shutterstock
Pic: Shutterstock
The Vietnam National Textile and Garment Group (Vinatex) recently forecast that its consolidated profit before tax this year will fall by half to VND 382 billion ($16.5 million) year on year due to the negative impact of the COVID-19 pandemic. This is the lowest consolidated profit before tax over the past four years, according to the company.

Its consolidated revenue is estimated at VND 14.64 trillion, down by 27 per cent compared to last year’s figures, according to reports presented at its annual general meeting this year.

In the report, Vinatex has targeted this year’s revenue of the parent company at about VND 1.33 trillion, down by 5 per cent and profit before tax at 130 billion, down by 56 per cent compared to 2019 because of difficulties in production and business during and after the pandemic.

In the 2020-25 period, the group must adjust its development strategy because it faced competition in technology but not in price 10 years ago, Vinatex chairman Tran Quang Nghi said.

In its development plan for this period, Vinatex would promote mergers and acquisitions, and restructure its businesses because the group's current business and production model will become inefficient, according to a Vietnamese media report.

Besides continuing divestment, it would also buy shares of other companies as well as invest in newly-established enterprises necessary for the development strategy.

Vinatex's consolidated revenue in 2019 reached VND 20.14 trillion, similar to 2018 figures, fulfilling 91 per cent of the 2019 plan. Its profit before tax was VND 765.5 billion, or 91.2 per cent of the yearly plan and up 0.5 per cent over the same period last year.

According to the country’s General Department of Customs, in the first five months of this year, the domestic textile and garment industry saw a year on year reduction of 13.6 per cent in total export value to $10.56 billion due to the pandemic. However, this surged in May by 16 per cent to $1.87 billion over the previous month.

Fibre2Fashion News Desk (DS)

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