HDA – PROFIT BEFORE TAX IN 9 MONTHS OF 2021 INCREASED BY 33 TIMES
Dong A Paint Joint Stock Company (HNX: HDA) with 3 Factories and more than 700 retails stretching from South to North has continued to record impressive business growth in the first 9 months of 2021.
Vietnam's economy in the third quarter of 2021 was heavily affected by social distancing. The disruption of production chains in the Southern provinces combined with a severe decline in consumption has exerted negative pressure on economic development. Over the same period, the Industry and Construction sector decreased by 5%, the Consumer service sector downed 21.4% and the Index of Industrial Production (IIP) also recorded a decrease of 4.4%. The Paint industry with more than 600 Enterprises (in which 65% are foreign, 35% domestic) was affected when the sales decreased due to the difficulties of the Construction, Real Estate and Consumer industries. However, compared with Paint companies in the South, companies in the North are less affected. Dong A Paint Joint Stock Company (HNX: HDA) with 3 Factories and more than 700 retails stretching from South to North continues to record impressive business growth in the first 9 months of 2021.
9 Months Operational activities flourish
Thanks to the advantage of having 3 factories distributed in 3 regions, the Company aims to develop products suitable for climate by region, research and develop business strategies in accordance with consumption habits, local business culture to reach each target customer. In the first 9 months of 2021, Sales of 3 major product lines Vilacera, BEHR and BEWIN maintained growth and Consolidated revenue recorded VND 256.19 billion, increase 14% over the same period.
Cost of goods sold was recorded at VND 113 billion, a slight increase over the same period. Gross profit (GP) reached VND 78.95 billion, up 7% over the same period; Gross profit margin remained at a high level of 41.2%, higher than the average of the Industry. The interest expenses, plummeted by 25% to only VND 3.8 billion as a result of the flexible use of credit lines in appropriate periods. With the policy of reducing costs during the Covid period, Selling and Administrative expenses were only VND 54 billion, decrease 14% over the same period. Consolidated pre-tax profit (PBT) in the first 9 months of 2021 reached VND 22 billion, skyrocketed 33 times over the same period and 1.7 times higher than the whole 2020 PBT. Net profit margin exceeded 9% while the same period was -1.4%.
As of September 30, 2021, the Company's total consolidated assets reached VND 384.7 billion, 3% increase compared to the beginning of the period, Current assets increased by 3.45%, in which, Cash and cash equivalents recorded VND 40.7 billion, a slight improvement of 3%. Inventories increased by 36% to VND 65 billion, including various Painting products that are expected to launch to the market at the end of the year.
Total debt in the first 9 months of 2021 reached VND 96 billion, a slight increase compared to the beginning of the period due to supplementing working capital to serve production and business activities. However, the ratios of Debt/Total Assets and Debt/Equity remained at 0.25 and 0.45 respectively.
Increase the ownership in Bewin & Coating Vietnam JSC, expand production capacity
On September 30, 2021, General Meeting of Shareholders of Comapy approved the issuance of additional shares to increase the Company's Charter Capital. Accordingly, HDA registered to offer 11.5 million new shares to existing shareholders with the ratio of 1:1, expected to be completed in the fourth quarter of 2021 or the first quarter of 2022. The offering price is determined to be 10,000 VND/share. The capital raised will be used to increase ownership in subsidiary, Bewin & Coating Vietnam JSC and supplement capital for the company's production and business activities. The increase in ownership will supplement capital for the construction of new Factories, expand production capacity to improve business efficiency.
With the efficient operation of 700 retails distribution systems, HDA has captured a significant market share in major cities and provinces such as Hai Phong, Hai Duong, Quang Ngai, Thanh Hoa, Nghe An, Dong Nai, Ba Ria - Vung Tau..... Up to now, the Company's market share is estimated at nearly 5% and is expected to increase to 8% in 2025. The promotion of production and expansion of distribution system in the coming years will result in sustainable development.
After the 4th Covid wave was controlled, the production showed the recovery signs in October when the IIP index increased by 6.9% compared to the previous month, consumption has recovered as well after reducing restrictive orders. Besides, the resumption of fiscal investment projects along with the recovery of Construction, Real Estate and Consumption will promote a the recovery of the Paint Industry. Comapany’s sales are expected to increase strongly and contribute significantly to the Company's Revenue and Profit in the next time.
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