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Loss-making beverage maker eyed
The HCM City Stock Exchange has placed beverage producer Tribeco under control after the company posted losses for the second year in a row, with earnings in 2009 dropping by VND8.2 billion (US$443,243) from the previous year.
Beginning Monday, trading in the firm's shares will be limited to 15 minutes per session.
The company explained that they spent much sweat and money to recover the business after being hit by economic crisis in 2008, such as restructuring the distributing and marketing systems, as well as reinforcing the research to make new products.
The loss was unavoidable following the economic crisis and expensive efforts to restructure distribution systems, Tribeco General Director Huang Ching Liang wrote in the company's annual report, noting that costs related to restructuring and marketing rose by VND21 billion ($1.1 million) in 2009.
Business was improving and the company expected stronger performance in the near future, Liang said.
Tran Anh Dao of the HCM City Stock Exchange said that the exchange based its decision on the company's own financial statements.
"We don't need to wait for audited results because it's pretty hard to turn losses into profits after auditing," said Dao.
Investors should take note of the factors behind a company's losses rather than panic and rush to sell their shares en masse, she added.
Tribeco was alerted to the situation following its losses in 2008, and the company's shares would be de-listed in the losses continued for an additional year.
"The alert and control will be lifted if the firm submits financial statements next year indicating a recovery," Dao said, noting that 17 companies last year were cleared following warnings issued in 2008. Meanwhile, however, Bach Tuyet Cotton Company became the first listed company to be de-listed on the HCM City Stock Exchange due to successive years of losses.
Earlier last week, the exchange issued warnings regarding four other listed firms that posted significant losses in 2009, including Nam Viet Company, BASA , Ben Tre Aquafish and PetroVietnam Transportation.
Seasfood processors and exporters had a particularly difficult year, with losses blamed on a decline in export contracts from tradditional markets like the EU, US and Japan, all of which suffered under the global economic recession. Quality issues also undercut their business performance, with a number of seafood producers banned from further exports due to poor-quality products.
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