Seafood exporter Minh Phu suffers $4.1M loss in Q1
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Minh Phu Seafood, one of the country’s biggest shrimp processors, reported a loss of VND95 billion ($4.1 million) in the first quarter, ending its seven-year profitability streak.
Its revenues fell by half year-on-year to VND2.1 trillion.
The gross profit margin almost halved from over 11% to less than 6%, while interest on borrowings nearly tripled, contributing to the huge loss.
In the comparable period last year it had earned profits of VND100 billion.
For the full year it targets revenues of VND18 trillion and profits of VND1.1 trillion.
Last year profit growth was in double digits and the highest in a decade.
According to Agribank Securities JSC, the results of shrimp export companies, including Minh Phu, are bleak because demand in key markets such as the U.S. and EU was weak during the quarter.
Questions & Answers
Q.What was Minh Phu's total revenue for the first quarter?
What was Minh Phu's total revenue for the first quarter?
Minh Phu Seafood's revenues for the first quarter were VND2.1 trillion. This figure represents a 50% decrease compared to the same period last year.
Q.What is Minh Phu's profit target for the full year?
What is Minh Phu's profit target for the full year?
The company is targeting a profit of VND1.1 trillion for the full year. This is part of their broader target of VND18 trillion in revenues.
Q.How did the gross profit margin change for Minh Phu in the first quarter?
How did the gross profit margin change for Minh Phu in the first quarter?
The gross profit margin almost halved during the quarter. It dropped from over 11% in the comparable period last year to less than 6% this quarter.
Q.What factor, beyond falling revenue, contributed significantly to the first-quarter loss?
What factor, beyond falling revenue, contributed significantly to the first-quarter loss?
Interest on borrowings nearly tripled in the first quarter, which was a significant factor contributing to the substantial loss. This compounded the effect of falling revenues and margins.