Vinatex facing difficulties in past two quarters

13:19 | 08/08/2020
Scattered orders along with a saturated market for face masks – which was a temporary lean-to for so many textile and garment firms – have pushed Vietnam National Garment and Textile Group (Vinatex) in the deep in the last two quarters.
vinatex facing difficulties in past two quarters
Vinatex continues to facing difficulties in last two quarters this year

This was shared by Vinatex chairman Le Tien Truong at the conference summarising the group's performance in the first six months and discussing plans for the second half of the year.

Accordingly, In the second quarter, the group acquired VND3.08 trillion ($133.9 million) in net revenue, down 36 per cent on-year. Gross profit was VND280 billion ($12.17 million), down 36 per cent.

Regarding the accumulated business results for the first half, Vinatex reported VND7.04 trillion ($306.1 million) in net revenue, a decrease of 24.5 per cent on-year. After-tax profit was VND276 billion ($12 million), down 20.7 per cent on-year. Especially, in April, the group's revenue was nearly zero because of the social distancing and isolation policies.

The group had VND69 billion ($3 million) in revenue from financial activities, increasing by 25 per cent on-year. Meanwhile, net profit was down 22 per cent to VND120 billion ($5.2 million).

The shares of a number of member companies dropped in value, including Viet Tien Garment Corporation and Phu Bai Spinning JSC which shed more than half and a quarter, respectively, compared to their valuation before the COVID-19 pandemic.

According to Truong, the first half was not all that difficult a period because the number of COVID-19 patients was not overly large. At present, the pandemic returned to Vietnam and promises heavy disruptions. In addition, countries across the globe are struggling to control the epidemic. These situations decreased consumption demand, thus, the third and fourth quarters will be a challenging period for the textile and garment sector, including Vinatex.

At present, the corporation received few orders from overseas for the fourth quarter, which is a challenge for the company. In addition, the selling price of face masks have been decreased to equal production costs, thus the group can no longer acquire profit from this segment.

“In spite of challenges, the group will make an effort and seize every business opportunity, including manufacturing new products in order to maintain operations as well as jobs for employees,” Truong said.

By Kim Oanh

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