VNG perseveres after losing almost two thirds of investment in Tiki
VNG perseveres after losing almost two thirds of investment in Tiki
According to VNG’s first half financial statement, after investing VND506 billion ($22.4 million) in Tiki, VNG’s investment is currently worth only VND185 billion ($8.2 million) at the moment.
VNG has just released its financial statement for the first half of 2018, which outlined VND2.065 trillion ($91.4 million) in revenue, slightly down compared to the same period of last year. Of this, the online game segment continues providing the largest proportion of 81.5 per cent, with VND1.682 trillion ($74.4 million) in net revenue, while VNG gained VND313 billion ($13.85 million) from online advertisement revenue, capturing 15.2 per cent and up 31 per cent on-year.
The remaining revenue of VNG in the first half of 2018 came from value-added services on telecommunications networks and internet (VND32.7 billion–$1.45 million), ringtones (VND16.2 billion–$0.72 million), and sales (VND8.4 billion–$0.37 million), which contributed VND38.7 billion ($1.7 million) in the first half of last year.
Meanwhile, the revenue from financial activities was VND74 billion ($3.27 million), but VNG’s costs doubled, and the affiliated company made a loss of VND99 billion ($4.38 million) in the first half. As a result, VNG’s after-tax profit was VND244 billion ($10.8 million), down 58 per cent on-year.
The statement showed that VNG continued pouring money into Tiki, although the e-commerce company has been posting consecutive losses. Specifically, VNG poured around VND384.4 billion ($17 million) into Tiki as of the end of 2017. On April 18, 2018, VNG invested an additional VND121.8 billion ($5.4 million) in Tiki, according to a contract to purchase newly issued shares. Thus, VNG made a total investment of VND506.2 billion ($22.4 million) in Tiki by June 30.
In 2017, VNG recorded a loss of VND219 billion ($9.7 million) from Tiki. In the first half of this year, this loss rose by VND102 billion ($4.5 million). Thereby, the total losses in Tiki reached VND321.2 billion ($14.2 million) as of June 30 and the value of VNG’s investment in Tiki is only VND185 billion ($8.2 million).
Earlier, in early 2016, VNG spent VND384.4 billion ($17 million) to acquire 38 per cent of Tiki, at a share price of VND104,300 ($4.6). At this price, Tiki was evaluated at over VND1 trillion ($44.25 million), making it one of the most valuable startup companies.
At June 30, 2018, VNG’s total assets stood at VND4.364 billion ($193 million), up 1.5 per cent compared to the beginning of the year, including VND2.462 billion ($109 million) of deposits in banks.
