Six consecutive quarters without generating a single penny in profit.
Dong A Plastic Joint Stock Company (DAG), formerly Dong A Plastic Trading and Manufacturing Company Limited, has been present in the market since 2001 and is a well-known brand in the production of plastic products used in the construction and advertising industries.
Since the beginning of 2023, DAG's business has gone through a terrible period, failing to generate any profit for six consecutive quarters.
Dong A Plastic (DAG) has suffered losses for six consecutive quarters, its equity capital has been eroded by losses, now standing at just over 4% (Photo: Provided)
Specifically, DAG's loss-making period began in Q1/2023, when the company recorded revenue of VND 558.8 billion and a net loss of VND 21.4 billion. The losses peaked in Q2/2023 at VND 102.7 billion.
In the last six months of 2023, DAG's revenue continuously plummeted, falling to VND 213.8 billion and VND 30.7 billion respectively, while DAG incurred losses of VND 16.2 billion and VND 22.3 billion in these two quarters.
Entering 2024, DAG recorded Q1 revenue of VND 30.3 billion, with a net loss of VND 15 billion. The Q2/2024 business results were not much brighter, even worse than before. Revenue only reached VND 55.3 billion, but the cost of goods sold amounted to VND 81.1 billion, resulting in a gross loss of VND 10.7 billion.
In addition, pressure from interest expenses, which amounted to VND 36.5 billion, along with business management costs of VND 4.3 billion, resulted in DAG incurring a net loss after tax of VND 66.6 billion.
Equity capital was almost completely depleted due to losses.
The consecutive losses have caused Dong A Plastic to face significant problems in maintaining working capital for its business operations.
At the end of Q2/2024, the company's total assets amounted to VND 1,394.8 billion. Of this, cash was only VND 843 million. Accounts receivable from customers totaled VND 298.9 billion, along with inventory at VND 535.5 billion. In addition, fixed assets accounted for VND 560.6 billion.
DAG's current capital structure is largely based on debt. Specifically, liabilities amount to VND 1,367.6 billion, equivalent to 98% of total capital. Of this, short-term debt accounts for VND 733.6 billion, and long-term debt accounts for VND 412.1 billion.
The initial owner's capital contribution was 603.1 billion VND, but due to consecutive losses, it has been eroded to only 27.3 billion VND. This remaining capital is equivalent to just over 4% of the total capital. This is due to the undistributed after-tax loss recorded in the financial statements, amounting to 641 billion VND.
Dong A Plastic's shares have been suspended from trading.
Due to recent poor business results, Dong A Plastic's shares have also been suspended from trading by the Ho Chi Minh City Stock Exchange (HoSE).
Previously, DAG shares were subject to trading restrictions from May 17, 2024, due to the listed company's failure to submit its audited financial statements for 2023 by more than 45 days as stipulated.
On August 2nd, 2024, HoSE issued a reminder to Dong A Plastics regarding the delay in disclosing information. Based on these continuous violations of information disclosure regulations, HoSE has suspended trading of DAG shares effective August 15th, 2024.
In addition, DAG was also placed on the warning list because the auditing firm issued a qualified opinion on the company's 2023 financial statements, and the retained earnings after tax on the audited consolidated financial statements for 2023 were negative VND 588.1 billion.
On the stock market, DAG shares have continuously depreciated over the past year, experiencing a sharp decline. From a price of 3,100 VND/share at the beginning of 2024, by August 9, 2024, DAG shares had fallen to only 1,670 VND/share, equivalent to a loss of nearly half their value.
Source: https://www.congluan.vn/nhua-dong-a-dag-lien-tuc-thua-lo-no-chiem-98-co-phieu-bi-dinh-chi-giao-dich-post307273.html
