10:26 | 13/10/2019 Car & Motor
Auto firm THACO reported a 40 percent fall in half-yearly profits to VND1.83 trillion ($78.8 million), the lowest in five years.
|A Peugeot assembled at THACO in Chu Lai Industrial Park, Quang Nam Province - Photo acquired by VnExpress|
Costs ballooned even as revenues edged down, according to the latest audited half-yearly statement released by THACO, formally known as Truong Hai Auto Corporation.
Revenues were down 3 percent year-on-year to VND26.85 trillion ($1.16 billion), while the cost of sales rose 36 percent to VND1.18 trillion ($50.8 million), and financial expenses almost doubled to VND1.22 trillion ($52.5 million).
Interest payments accounted for 56 percent of financial costs, having risen 146 percent to VND678 billion ($29.2 million).
It was the result of the company taking on an additional VND6.55 trillion ($282 million) in both long- and short-term debts during the period, and now owes VND31.44 trillion ($1.35 billion).
It used these funds to acquire shares and invest in Hoang Anh Gia Lai (HAGL), once a leading real estate and agricultural conglomerate that is now under dire financial pressure.
THACO is a leading assembler of foreign vehicles in Vietnam like Peugeot, Kia and Mazda, and it is currently planning to build BMW cars.
Since 2015 its first-half profits had always hovered around VND3 trillion ($129 million).