Firms face probable delisting after three-year losses
Firms face probable delisting after three-year losses
A number of listed companies risk being forced to leave the stock market after they reported losses for three consecutive years.
Decree No 58/2012/ND-CP, issued in July 2012, stipulates that securities shall be delisted if the listing company suffers a loss for three consecutive years, or total accumulated losses in the most recent audited financial statements exceed paid-up charter capital.
Seven companies which incurred losses in 2015 and 2016 continued to report losses in the last quarter of 2017 and their shares are in jeopardy of being removed from the stock market this year.
They include the Viet Nam National General Export – Import SJC No 1 (TH1), Hung Long Mineral and Building Material JSC (HKL), Bach Dang TMC Construction Investment JSC (BHT), Textbook Printing JSC in HCM City (SAP), Song Da Electrical Engineering JSC (SDE), Simco Song Da JSC (SDA) and Saigontourist Transport Corporation (STT).
Despite earning a profit of VND1.5 billion in the last quarter of 2017, Song Da Electrical Engineering still incurred a loss over VND234 billion (US$10.3 million) for the whole year, a sharp increase compared to losses of VND4.2 billion in 2016 and VND9.8 billion in 2015.
Meanwhile, TH1, owned by “Shark” Tran Anh Vuong, one of the four sharks in the reality show Shark Tank Viet Nam, reported a loss of over VND142 billion (US$6.3 million) in 2017, much higher than its target of VND10 billion loss for the whole year. It also reported cumulative losses of VND268 billion in the two previous years.
Saigontourist Transport posted a loss of VND19 billion last year which was also higher than the 2016’s loss of just VND5 billion. The company attributed its poor performance to other expenses incurred during the tax inspections of the fiscal years of 2007-15, while taxi tax revenue fell.
Meanwhile, the 2017 profit target of VND2 billion in 2017 of Hung Long Mineral was cracked when the company announced a loss of over VND13 billion due to a sharp decline in sales. In 2015 and 2016, KHL reported losses of VND2.74 billion and VND57.3 billion, respectively.
Similarly, Bach Dang TMC Construction incurred another loss of VND11.7 billion in 2017 though the company set a profit target of VND2.5 billion.
Textbook Printing and Simco Song Da also announced losses for three consecutive years in 2017, but their losses declined sharply to around VND1 billion each.
Viet Nam Ocean Shipping JSC (VOS) has yet to release the 2017 financial statements but it has reported losses for 11 consecutive quarters with cumulative losses mounting up VND1 trillion, eating out 74 per cent of its charter capital.
On the other end of spectrum, Sai Son Cement JSC (SCJ) and Song Da 7 JSC (SD7) returned to profitability in 2017 after two years of incurring losses. This will help these two companies remain listed in the stock exchanges.
