Vietnam textbook publisher reports record net profit
In this article (5)
State-owned Vietnam Education Publishing House experienced its most profitable year in 2021, earning VND287 billion ($12.3 million) in after-tax profit. The profit was 2.5 times higher than the target set by the Ministry of Education and Training and the highest earnings in the publisher’s history.
In previous years, the publisher’s after-tax profit hovered between VND120-150 billion a year. A recently released business report says the publisher printed more than 164 million textbooks last year, exceeding the annual target by about 40 percent. Its earned total revenues of VND1.8 trillion, over 97 percent of which came from book publishing.
The company had a return on equity (ROE) of 39.9 percent and a return on total assets (ROA) of 17.9 percent. The publisher’s seven subsidiaries also reported profits totaling VND46 billion. Another factor in the improved performance was the increase in textbook prices.
In the 2020-2021 school year, the prices of textbooks were two to four times higher under the new general education program.
The publishing house explained that prices went up because the cost of all four components – the number of books in one set for each grades, the cost of organizing the manuscript, the cost of materials and the cost of marketing – increased significantly.
Textbooks are not currently on the list of items priced by the State, but by enterprises that have to declare their prices to the Ministry of Finance. Publishers are solely responsible by law for the correctness and suitability of their pricing structures.
The education ministry had asked the publisher to review the entire process of compilation, printing and distribution to reduce the prices of textbooks. Following this, a 3-9 percent reduction was made over the original declaration.
Questions & Answers
Q.What was the main reason for the significant increase in the publisher's textbook prices?
What was the main reason for the significant increase in the publisher's textbook prices?
The publisher explained that prices increased because the cost of all four components, the number of books per set, manuscript organisation, materials, and marketing, rose significantly. These factors contributed to the higher prices under the new education program.
Q.How did the publisher's 2021 after-tax profit compare to its target and previous years?
How did the publisher's 2021 after-tax profit compare to its target and previous years?
The 2021 after-tax profit of VND287 billion was 2.5 times higher than the target set by the Ministry of Education and Training. This figure also significantly exceeded previous years' profits, which typically hovered between VND120-150 billion.
Q.What percentage of the publisher's total revenue came from book publishing in 2021?
What percentage of the publisher's total revenue came from book publishing in 2021?
In 2021, over 97 percent of the publisher's total revenues, which amounted to VND1.8 trillion, were generated from its book publishing activities. This indicates a strong reliance on its core publishing business.
Q.Who is responsible for setting textbook prices, and how was a price reduction achieved?
Who is responsible for setting textbook prices, and how was a price reduction achieved?
Enterprises set textbook prices and declare them to the Ministry of Finance, as textbooks are not State-priced. Following a review request from the education ministry, the publisher made a 3-9 percent reduction from its original price declaration.
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