return icon Vietnamnet.vn

Bamboo Airways forces down FLC's profit

The operation of Bamboo Airways deeply decreased the gross margin of FLC’s services.

 

 

{keywords}

Bamboo Airways has probably been making losses since its recent launch, dragging down FLC Group's performance

 

 

Profit falling

FLC Group’s latest financial report pointed out that as of the end of the second quarter the company still recorded rapid growth.

Especially, pre-tax profit increased by more than 80 per cent. However, adding the subsidiaries’ business results, the group's profit reduced significantly against the same period last year.

Despite FLC earning VND3.255 trillion ($141.52 million) in combined net sales, up 9 per cent on-year, its loss was nearly VND51 billion ($2.2 million) due toan increase of 25 per cent in expenseswhile in the same period last year, the group reported a profit of VND347 billion ($15.1 million).

Most of its sales and management expenses increased sharply. Especially, the group's loan interest burden doubled to VND173 billion ($7.52 million).

On the other hand, thanks to the VND729 billion ($31.7 million) revenue from financial activities (mainly in interest from selling the group's interest in several projects), the company managed to turn VND102 billion ($4.43 million) of net profit.

As a result, FLC Group's combined pre-tax profit came to VND79 billion ($3.43 million). After discounting corporate income tax, the company only had VND13 billion ($565,200) in net profit, nearly halving over year.

The group’s cumulative revenue in 2019’s first half was VND6.235 trillion ($271.1 million) in integrated revenue, up 19 per cent on-year, but pre-tax profit fell by 23 per cent to VND151 billion ($6.57 million).

Even, the growing corporate income tax reduced FLC's earnings to VND21 billion ($913,000) as of the end of 2019’s second quarter, to only one-fifth of last year's figure.

In addition, the group’s gross margin remained 0.5 per cent, equaling VND33 billion ($1.43 million), while the rate last year exceeded 10.4 per cent.

Losses from resorts, tourism, golf, and aviation

Selling goods, equipment, and building materials contributed the lion's share of FLC’s revenue, with more than VND3.038 trillion ($132.1 million), up 10 per cent on-year.

Meanwhile, revenue from service provision hit VND1.813 trillion ($78.83 million), six times more than last year.

The financial report revealed that the performance of FLC's airline business was calculated under the service business accounts, which include resorts, golf, and tourism.

However, different from the previous year, services pulled FLC’s gross margin down.

Specifically, FLC sufferes VND295 billion ($12.83 million) from its services business.

As of the end of June, the group’s debts hit VND18.462 trillion ($802.7 million), twice as much as the owner’s equity. Interest-bearing debts were VND5.789 trillion ($251.7 million), up 13 per cent against early 2019.

Accordingly, all increases of debts are loans and current liabilities, increasing the interest burden by millions of US dollars. In addition, the company’s principal payment was VND1.668 trillion ($72.52 million).

Despite not publishing information on Bamboo Airways’ half-year business performance, aviation experts assumed that a newbie like Bamboo Airway would hardly make a profit in the short term, especially as the local aviation market is growing fiercely competitive.

The airline currently has 17 domestic routes and expects to serve 5 million passengers at least in 2019 and has been exploiting international routes (Japan, Singapore, and South Korea) since the second quarter of this year.

According to VNDirect Securities Corporation’s latest report on the aviation market, as of the end of May, FLC’s new airline held 4-5 per cent of the market after four months in operation. VIR

Van Anh

MORE NEWS

VIETNAM NEWS HEADLINES JUNE 25

Exhibition spotlights Hue’s enameled bronze art

VIETNAM BUSINESS NEWS JUNE 25

Government seeks to resolve businesses’ capital shortage

Online exposure confers stardom on young singers

Restrictions on traditional entertainment channels by the Covid-19 pandemic have turned out to be a blessing in disguise for some young singers presenting their talents online.

Hanoi's transport department proposes more vehicles using the exclusive BRT lane

Hanoi Department of Transport has proposed the municipal People's Committee to allow passenger cars with 24 seats or more, official vehicles, ambulances and fire trucks to use Bus Rapid Transit (BRT) lanes in the capital.

16 Vietnamese designers to open Thailand Fashion Week 2022

A fashion collection by 16 young Vietnamese designers is set to open Thailand Fashion Week 2022 for the first time, with the outfits on show featuring images of Vietnamese cultural heritages.

The man who helps Vietnamese find their biological parents

Do Hung Phuc’s joy is to help those who lost their parents at birth to find their roots. In three years, the young man has created many magical and emotional reunions.

US increases coffee imports from Vietnamese market

The market share of Vietnamese coffee as part of the United States’ total imports increased from 8.95% to 9.6% during the opening four months of the year, according to statistics compiled by the General Department of Vietnam Customs.

Teenager specializes in diaphonization of animals

Two years ago, after he saw images of diaphonized specimens on the internet, Nguyen Tien Minh Duy, 15, from Buon Ma Thuot City began searching for information and learning about diaphonization.

Universities use ‘conflicts’ to help students learn more about business

Future schools need to be good at designing experiences for students to help them in their career and purpose, Lee Newman from Spain’s IE University said in an interview with VietNamNet.

Famous painter Bui Xuan Phai's works on display for first time

Sixty works by late famous painter Bui Xuan Phai, many of which were created toward the end of his life, are on display in Ho Chi Minh City.

5-year-old Hanoian conquers highest mountains in Vietnam

Dang Quang Vinh, together with his parents, has climbed the five highest mountains in Vietnam, including Lao Than, Lung Cung and Nhiu Co San, which even adults dare not climb.

Belgian comic artist, musician to attend Hue Festival 2022

Belgian comic artist Dany and musician-singer Konoba will represent artists from the Wallonie-Bruxelles region at Hue Festival 2022, according to the Wallonie-Bruxelles delegation in Vietnam.

Family has 3 kids with small stature

The family of Doan Thi Nhan in Hoang Viet hamlet, Tan Phuoc commune of Tan Hong district in Dong Thap, in the Mekong Delta, has a number of children with small stature.

Vietnamese player wins first int’l badminton title at Croatia Open

Vu Thi Anh Thu of Vietnam secured a gold medal in the Croatia Open badminton tournament on June 23 in Dubrovnik.

Face masks and community immunity

Recently, I visited a government agency. The security guards, who were not wearing face masks, did not allow me to enter the agency because I did not have a mask.
back_to_top