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Opaque earnings reports anger investors
Many listed companies released dismal third-quarter earning reports that did not give detailed and precise explanations for the substantial losses made in the period.
Construction firm Full Power (FPC) said on the Ho Chi Minh Stock Exchange’s website that its after-tax profit in the three months ended October 31 slumped 57.8 percent to VND106.7 billion (US$6.31 million) from the previous quarter. The wholly foreign-owned firm only said in its report that “the loss came in a wake of rise in operational costs caused by this year’s accelerating inflation and increases in the operational costs of some subsidiaries.”
Dong Nai Roofsheet and Construction Material Joint Stock Co. (DCT) said the rainy season, when demand for building usually falls, was the main cause of a 56.23 percent decrease in third-quarter pretax profit to VND5.9 billion ($350,000).
Similarly, Vinh Son Hydropower blamed the dry season in central provinces for lower output resulting in a 47 percent drop in net profit to VND606.6 billion ($35.80 million).
Some listed companies used equally weak explanations for third quarter losses. Ho Chi Minh City Metal Corp. (HMC) and Da Nang Construction Building Materials and Cement Joint Stock Co. (DXV) both said a plunge in demand for building materials sank their third-quarter earnings results.
HCMC Metal Corp.’s pretax profit in the three month period dropped 36.9 percent to VND21.9 billion ($1.30 million) while rival Da Nang posted a 14 percent fall in revenue to VND219 billion ($12.95 million).
“Most listed firms’ earnings reports share similarities,” said Nguyen Long, a client of Bao Viet Securities Corp. “I think they just want to meet the stock exchange regulation requiring listed companies to report earning result every quarter.
However, those kinds of reports provide no real information for shareholders like me.”
Another investor said shareholders were also upset with listed firms for not releasing any plans to offset losses.
“In other countries, as well as the company’s earning report, the board of directors also has to write a report to highlight their firm’s advantages, difficulties and solutions for overcoming the difficulties,” said economist Le Dat Chi from the HCMC University of Economics. “This helps to keep shareholders confident in the management of the companies.”
Mai Phuong
Thanh nien
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