Vietnam Sun Corporation (Vinasun) has reported the third consecutive quarter of loss in its passenger transport business due to competition from ride-hailing services.

Vinasun (code: VNS) has just announced its consolidated financial statements for the second quarter, with its business results on a downward trend.

Sales of Vinasun hit VND530 billion ($23.35 million), down 35 per cent on-year. Gross profit reduced by 16 per cent to VND97.5 billion ($4.3 million), which was not enough to compensate for expenses. Vinasun therefore suffered a loss of VND5 billion ($0.22 million) in the second quarter of 2018 - the third consecutive quarter for the company to report loss in its passenger transport business.

However, Vinasun recorded VND22 billion ($0.97 million) from other business segments such as liquidating old cars. As a result, the company still gained VND16 billion ($0.7 million) in pre-tax profit, down 73 per cent on-year.

In the first half of this year, Vinasun earned VND1.019 trillion ($44.9 million) in total revenue, down 46 per cent on-year. Of this, revenue from franchise increased to over VND400 billion ($17.6 million), four-fold as compared to the same period last year and equivalent to the sales from taxi services.

Meanwhile, Vinasun’s profit reached only VND30 billion ($1.32 million), approximately a quarter of the same period last year. Gains from liquidating cars has been decreasing although the number of liquidated cars has increased.

In the latest annual general shareholders meeting, Vinasun set a low target for this year, but its business situation is still worse than predicted.

On May 25, Singaporean GIC Private Limited sold 5.4 million VNS shares to make a full exit from Vinasun. The selling price was estimated at roughly 40 per cent of the purchasing price of GIC in 2014, and the fund was estimated to lose approximately VND120 billion ($5.3 million) after four years of investment.

This shows the general business situation of Vietnam’s taxi sector. Against strong competition from ride-hailing services like Grab, most taxi brands (such as Mai Linh and Vinasun) have been forced to narrow down their scale and cut costs to maintain their business activities and ensure growth of the company.

VIR