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TYA: Explanation for loss in 3 quarters
Taya (Vietnam) Electric Wire And Cable Joint Stock Company has explained loss in 3 consecutive quarters and plan for second half of 2010 as follows:
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Unit: VND
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Items |
Q4/2009 |
Q1/2010 |
Q2/2010 |
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Net sales |
207,955,925,360 |
230,634,220,830 |
234,007,857,125 |
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Selling price |
181,397,662,159 |
205,993,721,073 |
219,378,514,509 |
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Difference of exchange rate |
-9,946,778,806 |
-14,026,572,476 |
-15,315,484,572 |
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Profit of business activities |
26,558,263,201 |
24,619,481,757 |
14,629,342,616 |
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After-tax profit |
-1,428,329,497 |
-132,619,979 |
-11,089,318,182 |
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Selling price/net sales |
0.87% |
0.89% |
0.94% |
1. Business result in the closest 3 quarters:
2. Business situation
Sales in Q4/2009, Q1/2010 & Q2/2010 were stable and business activities of the company run well.
3. Reasons of loss:
- High selling price: Copper price of the LME market in world rapidly increased leading to decrease of profit
- Difference of exchange rate: Short-term loans for importing materials at the rate of VND16,500/USD, however, at the payment time, the rate was up to VND19,000/USD.
4. Plan for the second half of 2010:
Although the world economy has gradually recovered, the company has been very cautious to import materials for production. In order to minimize risks of fluctuation of copper price, copper materials in stock are limited within 30 days of usage. However, the company proactively stores materials when the price trend is more advantageous.
The average copper price for 3-month delivery was USD6,530/T in June and USD6,730/T in July. Copper price in Q3 and Q4/2010 is expected not to have big fluctuation. In case sales continues to be stable, profit of 2010 would be very optimistic.
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