Phuong Nam (PNC) pays first dividends in seven years

Sep 19th at 08:31

19-09-2018 08:31:15+07:00

Despite overcoming the 2017 gloom, Phuong Nam Cultural JSC is currently pressed by debt and dividend payments for its shareholders who have not received dividends for seven years.

Accordingly, Phuong Nam is planning to pay 20 per cent in dividends to shareholders. Thus, seven years after it paid 5 per cent dividend, Phuong Nam’s shareholders can once again enjoy the benefits of their investment. However, despite three times stating that dividens will be paid, it has not reveled the form of payment.

Its good business in this year’s first half as well as the VND261 billion ($11.5 million) capital from selling 20 per cent of CJ CGV may be the main reason behind its decision to pay dividends.

Specifically, in 2018’s first six months, Phuong Nam recorded VND338 billion ($15 million) in net sales, up 25 per cent on-year, and VND8 billion ($354,000) in after-tax profit, which signifies it has managed to get out of the swamp it has been slogging through for the past several years.

Over the past few years, Phuong Nam’s business performance has been poor. Especially in 2017, the firm announced record losses of VND66.4 billion ($2.93 million), raising its accumulated losses to VND106 billion ($4.69 million).

Along with this, its long-term debt from Cross Junction Investment (CJI) also forced Phuong Nam to sell its most efficiency investment, CJ CGV, with the price equalling nearly 60 per cent of what the stakes were worth seven years ago.

Explaining the divestment, Phuong Nam leaders stated that the firm had to divest to ensure liquidity to repay its debts and maintain its business. According to the loan agreement with CJI, Phuong Nam cannot to take up loans from another individual or organisation, and the repayment deadline for this loan was June 30, 2018 and has not been extended.

The total proceeds from the divestment will be used to pay off the firm’s debt of $7 million in principal and $818,584 in loan interest to CJI. As of the end of 2017, Phuong Nam’s total debts were VND485 billion ($21.46 million), equalling 94 per cent of the firm’s assets.

vir