Vinataba reports decreasing profit after giving up confectionery firms
Vinataba reports decreasing profit after giving up confectionery firms
After earning plenty of money from divesting from Hai Ha Confectionery JSC and Huu Nghi Food JSC, Vietnam National Tobacco Corporation (Vinataba) reported a decrease in profit due to giving up these two confectionery firms.
In March 2017, Vinataba registered to sell all of its 10,347,630 shares, equal to 51.74 per cent of the charter capital, in Huu Nghi Food. At the same time, the firm also registered to offload 8.4 million shares, or 51 per cent stake, of Hai Ha Confectionery.
As a result, four individuals spent over VND824 billion ($35.9 million) to acquire the stake in these two confectionery firms.
Notably, on March 17, Vu Hai spent VND155 billion ($6.75 million) on buying 3.9 million Hai Ha Confectionery shares and Nguyen Thi Duyen spent VND405 billion ($17.65 million) acquiring 8.37 million shares.
On March 21, Nguyen Van Dung and Luu Thanh Tam bought a total of six million shares to own 20 and 10 per cent stakes in Huu Nghi Food, respectively. At the time, Huu Nghi Food’s shares were valued at VND44,000, thus, these two individual paid VND176 billion ($7.66 million) and VND88 billion ($3.83 million) for the sale.
The two share sales contributed a large part to Vinataba’s pre-tax profit of VND1.42 trillion ($61.87 million) in the first half of last year.
However, the happiness only lasted for a short time because after completing the sales, Vinataba’s revenue fell.
Notably, according to the company’s financial statement, in 2017 Vinataba reported VND25.68 trillion ($1.12 billion) in revenue, signifying a decrease of 3.91 per cent on-year. According to Vinataba, this excluded the business results of Hai Ha and Huu Nghi Confectionery.
According to the forecast of the firm, in 2018 it may see a 27 per cent decrease in pre-tax profit due to losing the profit from the two confectionery firms.
Vinataba was established in 1985. It is not only the largest cigarette producer in Vietnam, but one of the largest enterprises in the country. It is a state-owned holding group which, since June 2007, has been the only concern permitted to produce, import, and distribute cigarettes and cigars in Vietnam.
In 2000, Vinataba cooperated with Japan Tobacco International (JTI) to produce the Mild Seven (Mevius) cigarette in Thanh Hoa Tobacco Factory (currently Thanh Hoa Tobacco Corporation).
In 2001, the firm cooperated with British American Tobacco plc. to establish a $65 million joint venture company named British American Tobacco-Vinataba, to produce high quality tobacco fibre to stop fibre imports. The joint venture’s capacity is approximately 19,200 tonnes of fibre per year. The fibre factory officially came into operation at the end of 2004.
