Revenue growth, profit remains flat

Digiworld Corporation (Code: DGW) is a unit operating in the field of trading and manufacturing information technology equipment, components and software.

In the first half of 2024, facing declining purchasing power in the retail market, Digiworld also recorded a decline in semi-annual business results.

In the second quarter of 2024, Digiworld's revenue was recorded at VND 5,008 billion, up 8.9% over the same period. Gross profit from business activities reached VND 457.7 billion, up 16.4% over the previous year.

During the period, financial revenue decreased from 44.7 billion to 38 billion VND. On the contrary, financial expenses increased from 45.2 billion to 48.2 billion VND. Of which, interest expenses accounted for 20.7 billion VND, down by half compared to the same period.

Sales expenses and administrative expenses increased to VND286 billion and VND58.2 billion, respectively. As a result, after deducting expenses and taxes, Digiworld recorded a profit after tax of VND87.8 billion, almost unchanged compared to the same period last year, despite revenue growth.

Digiworld's accumulated revenue in the first 6 months of the year recorded a total revenue of VND9,993 billion, up 16.8% over the same period. Profit after tax reached VND181 billion, up only 7.1%.

Compared to the business target set for 2024 with revenue of VND 23,000 billion and profit after tax of VND 490 billion, DGW has only completed 43.4% of the revenue plan and 37% of the profit after tax plan for the whole year. Thus, if there is no significant breakthrough in the last months of the year, DGW will almost certainly fail its business plan.

DGW leaders are still confident in completing the year's plan.

In the context of completing less than 40% of the yearly plan, DGW leaders are still confident that they can achieve the set goals with changes from now until the end of the year.

According to the company's plan, from the third quarter of 2024, Digiworld will distribute new products from MSI including laptops, PCs, monitors, mice, keyboards and components. At the same time, the company plans to distribute more household appliances such as air conditioners, refrigerators, etc.

In September 2024, the Government will cut off 2G signals nationwide. DGW's leadership hopes that this will create a wave of new phone purchases, especially low-cost smartphones.

In addition, DGW believes that Q3 is also the time to replace phones, reaching a peak in many years. MSI's revenue from product distribution is expected to reach about 6,000 billion VND, an increase of 11% over the same period last year.

With the above forecast of business activities in Q3/2024, Digiworld expects to make a breakthrough in Q3 and complete the business plan set out for the whole year.

Debt ratio still accounts for 62% of total capital.

As of the end of the second quarter of 2024, Digiworld's total assets reached VND 7,337 billion, a slight decrease compared to the beginning of the year. Of which, VND 6,713 billion were short-term assets. This is relatively understandable for a goods distribution unit like Digiworld.

Of which, short-term receivables from customers increased from VND1,982 billion to VND2,514 billion, equivalent to an increase of 26.8%. Inventories recorded VND3,052 billion while inventory price reduction provisions increased to VND143 billion.

In the capital structure, payables accounted for VND4,529 billion, equivalent to 62% of total capital. The amount of short-term debt recorded during the period increased by more than VND300 billion compared to the beginning of the year, accounting for VND2,650 billion.

The amount of short-term debt is almost as large as the owner's equity. Specifically, the owner's equity reached VND 2,808 billion. The owner's initial investment capital was VND 1,672 billion, and the accumulated undistributed profit after tax amounted to VND 1,049 billion.