Mercedes distributor sees plummeting profit
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Mercedes distributor Haxaco reported a 92% year-on-year fall in pre-tax profits in the first quarter to VND5.6 billion ($238,750).
Amid an industry-wide decline in sales, Haxaco’s revenues plummeted by 40% to VND992 billion.
High-interest rates and the difficult economic situation caused sales of the luxury brand to drop, the company said in a statement.
Its chairman, Do Tien Dung, said last week that in some months during the first quarter only a few cars were sold, and most of the income came from services.
The company expects the difficult situation to persist until the end of the year.
Yet it targets profits of VND310 billion for the year, the same as the record sum achieved last year, with Dung saying he does not want his employees to give up because the market situation is difficult.
Questions & Answers
Q.What was the main financial impact on Haxaco during the first quarter?
What was the main financial impact on Haxaco during the first quarter?
Haxaco's pre-tax profits fell by 92% year-on-year to VND5.6 billion. Revenues also plummeted by 40% to VND992 billion due to declining sales.
Q.What reasons did the company give for the significant drop in profits and sales?
What reasons did the company give for the significant drop in profits and sales?
The company attributed the decline to high-interest rates and the challenging economic situation. This led to a drop in sales of the luxury brand, with very few cars sold in some months.
Q.What is Haxaco's profit target for the full year, given the current challenges?
What is Haxaco's profit target for the full year, given the current challenges?
Despite expecting the difficult situation to persist, Haxaco targets profits of VND310 billion for the year. This is the same record sum achieved in the previous year.
Q.Where did most of Haxaco's income come from during the first quarter?
Where did most of Haxaco's income come from during the first quarter?
The company chairman stated that most of the income in the first quarter came from services. This was due to only a few cars being sold in some months.
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