Escaped loss thanks to financial revenue, only completed 4.4% of the year plan

Dabaco Vietnam Group Joint Stock Company (HoSE code: DBC) recorded revenue of VND 2,614 billion in the fourth quarter of 2023, up 17.8%. After-tax profit of VND 6.5 billion is relatively modest compared to the revenue scale. However, this result is still better than the loss of VND 230.5 billion in the same period last year.

Gross profit in the period reached VND 241.7 billion, an increase compared to the gross loss of VND 306.9 billion in 2022. Financial revenue in the year also increased to VND 11.1 billion, equivalent to an increase of 11.6%.

On the other hand, financial expenses increased sharply to VND70.4 billion, equivalent to an increase of 43.1%. Sales expenses and business management expenses totaled VND182.2 billion, an increase of 13.4%.

Looking at the business results, it can be seen that if it were not for financial revenue, Dabaco Vietnam would certainly have suffered a loss in the fourth quarter of 2023. The reason explained by the company is that the price of imported raw materials for animal feed production as well as the price of domestic agricultural products has decreased, thereby reducing the cost of animal feed production. Animal feed factories are all profitable and their profits have increased compared to the same period last year.

Dabaco's accumulated revenue in 2023 reached VND 11,110 billion, down 3.9% over the same period. Profit after tax reached VND 25 billion, up nearly 4 times over the same period. However, compared to the 2023 plan with revenue of VND 24,562 billion and profit after tax of VND 569 billion, Dabaco has only completed 4.4% of the annual profit plan.

Debt increased by 27.8% compared to the beginning of the year

By the end of the fourth quarter of 2023, Dabaco's total assets reached VND 13,011.7 billion, a slight increase compared to the beginning of the year. Of which, the majority were fixed assets with VND 5,552.3 billion, equivalent to 42.7% of total assets.

Regarding the capital structure, at the end of 2023, the company recorded an increase in debt. In which, total loans increased by 27.8% compared to the beginning of the year, accounting for VND 5,867.1 billion. The amount of loans is much higher than the equity, showing the existing risks to DBC's capital structure.

In addition, in 2023, Dabaco's cash flow from business operations recorded a negative VND907.8 billion while in the same period it was still positive VND339.8 billion. Therefore, it is not too difficult to understand why DBC is having to increase debt to compensate for the shortage of cash from business operations.