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Clothing makers in Asia give stark coronavirus warning

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Millions of jobs in Asia’s vital garment industry are at risk due to the coronavirus pandemic.

“If our workers don’t die from coronavirus, they’d die of starvation.”

This is the stark assessment of how the pandemic is impacting the clothing industry from garment factory owner, Vijay Mahtaney, the chairman of Ambattur Fashion India.

In normal times, Vijay Mahtaney and his partners Amit Mahtaney and Shawn Islam employ a total of 18,000 workers in three countries – Bangladesh, India and Jordan. But the outbreak has forced them to shut down the majority of the business, with just one factory, in Dhaka, partially operational.

Coronavirus lockdowns aren’t the only thing affecting their ability to pay their workers. They say their main problem is unreasonable demands from big clients – mainly in the US and the UK.

“Some brands are showing a true sense of partnership and high level of ethics in trying to ensure at least enough cash flow to pay workers,” Amit Mahtaney, the chief executive of Tusker Apparel Jordan, told the BBC.

“But we’ve also experienced demands for cancellations for goods that are ready or are work in progress, or discounts for outstanding payments and for goods in transit. They are also asking for a 30 to 120 day extensions on previously agreed payment terms.”

In an email obtained by the BBC, one US retailer has asked for a 30% discount “for all payables – current or order”, including those already delivered.

The reason they cite is to “get through this extraordinary period”.

“Their attitude is one of protecting only shareholder value without any regard to the garment worker, behaving in a hypocritical manner, showing complete disregard to their ethos of responsible sourcing,” Vijay Mahtaney said.

“Brand focus on share price, now means some of them don’t have money for this rainy day, and are coming to the weakest link in the supply chain, asking us to help them out when they could be applying for a bailout from the US government stimulus package,” Vijay added.

It comes as garment manufacturers have been hit hard by two major issues related to coronavirus lockdowns.

The problems started in February when factories couldn’t get the raw materials they needed from China, the world biggest exporter of textiles, which accounted for some $118bn (£67bn) in 2018.

Then as China’s textile factories reopened in recent weeks – giving garment manufacturers hopes of getting operations back on track – demand collapsed as retailers were forced to shut their doors after governments around the world imposed lockdowns.

Crucial industry

China may be known as the factory of the world, but when it comes to clothes, Bangladesh, Indonesia, Cambodia, Vietnam and Myanmar play a growing role.

“Garment manufacturing has been diversifying away from China for around ten years due to China’s high costs,” according to Stanley Szeto of apparel maker Lever Style which supplies premium brands including Hugo Boss, Theory, Vince, and Coach, as well as online names like Bonobos, Stitch Fix and Everlane.

It means that garment manufacturing is a crucial industry for many of Asia’s developing economies, with World Trade Organization data showing that Bangladesh and Vietnam are amongst the world’s four largest exporters of clothing. Bangladesh now accounts for 6.7% of market share, followed by Vietnam with 5.7%.

Bangladesh has more than four million garment workers, and textile and apparel products made up more than 90% of the country’s exports last year.

Cambodia and Sri Lanka also rely on the industry for more than 60% of their exports, according to Sheng Lu at the University of Delaware’s department of fashion and apparel studies.

The industry accounts for more than half of all manufacturing jobs in Bangladesh, and 60% in Cambodia, with production being a particularly important employer of women.

Associate Professor Lu thinks the coronavirus pandemic could see countries such as Bangladesh, Vietnam, Cambodia and India cutting between 4% to 9% of garment sector jobs.

That is partly why the Bangladeshi government is trying to help the industry.

“It has offered a generous stimulus package to subsidise wages, convert loans to long-term debt and offer very reasonable interest rates,” said Shawn Islam, managing director of Sparrow Apparel Bangladesh. “While it’s not enough to weather the storm, it will help.”

The Cambodian government has also announced tax holidays for textile factories and proposed a wage subsidy scheme for workers.

That is because this outbreak could result in a longer term impact like labour shortages, price increases of raw materials and a lack of production capacity, said Associate Professor Lu.

After growing criticism and pressure, some brands including H&M and Zara-owner Inditex have committed to paying in full for existing orders from clothing manufacturers.

“Brands have profited for many years from producing in low wage countries without social security systems and have in many cases built up huge empires through this business model,” said Dominique Muller of Labour Behind the Label. “Decades of exploitation must now be paid back to care for their workers.”

Factory owner Amit Mahtaney agrees.

“Retailers have to help out. Richer governments’ bailouts of the industry are also critical,” he said.

Without it, he claims, the industry could be wiped out completely. BBC

Source: https://vietnamnet.vn/en/business/clothing-makers-in-asia-give-stark-coronavirus-warning-632535.html

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Vietjet’s fourth-quarter revenue increases over four times

Vietjet Aviation Joint Stock Company (HoSE: VJC) reported net sales of VND11,807 billion ($503 million), which is 4.2 times more than the same period in 2021 and back closer to pre-pandemic levels.

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Vietjet reported net revenue of VND11,807 billion ($503 million) in the fourth quarter of 2022, an increase of 323% over the fourth quarter of 2021. Vietjet experienced a loss after tax of VND 2,171 billion ($92 million) for the entire year. In the history of the business, this was the first year with a loss.

The firm had a gross loss of VND3,843 billion ($163 million) due to a substantial increase in the cost of goods sold to VND15,650 billion ($667 million). This is the biggest quarterly gross loss ever for Vietjet.

Both financial income and expenditures were much larger than they were during the same period in 2021, totaling VND2,064 billion ($88 million) and VND1,353 billion ($57 million), respectively. The fourth quarter of the prior year only had a loss of VND82 billion ($3.5 million), but the current quarter saw a net loss of VND3,746 billion ($160 million).

In the fourth quarter of 2022, Vietjet unexpectedly reported VND 1,625 billion ($69 million) in “other income,” a significant increase from the VND 7.8 billion ($332 thousand) recorded the previous quarter.

Due to this exceptional result, Nguyen Thi Phuong Thao’s airline only had a loss after taxes of VND 2,358 billion ($100 million), which is significantly less than the net loss from the aforementioned commercial operations. The fourth quarter result is still Vietjet’s greatest ever after-tax deficit, though.

Vietjet reported a net profit of VND39,342 billion ($1.6 billion) for the whole 2022 fiscal year, a threefold increase over the prior year. To VND2,167 billion($92 million), the gross loss grew by 6%. After-tax loss of VND2,171 billion ($92.5 million), in contrast to a profit of VND122 billion ($5.2 million) in 2021.

Source: https://e.nhipcaudautu.vn/companies/vietjets-fourth-quarter-revenue-increases-over-four-times-3350414/

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Vietnam Airlines risks stock delisting

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The Ho Chi Minh City Stock Exchange (HoSE) on Thursday warned that Vietnam Airlines (HVN) could be delisted if an audit proves the company has logged an operating loss for three consecutive years.

In its warning, the HoSE cited the firm’s consolidated financial statement for the last quarter of 2022 in which Vietnam Airlines posted an accumulated loss of nearly VND34.2 trillion (US$1.46 billion) in 2022. 

The carrier also reported that its equity was negative VND10.2 trillion ($435.4 million) last year.

According to the Law on Securities, the stock of a public company must be delisted if it suffers annual operating losses for three consecutive years, if its accumulated losses exceed its charter capital, or if its equity is negative.

As such, if Vietnam Airlines’ audited consolidated financial statement for 2022 shows a loss, it will be the firm’s third consecutive year of operational losses and its ticker will be delisted, the HoSE warned. 

On June 1, 2022, the HoSE issued a decision to put HVN into ‘under control’ status after the firm released a report on its accumulated losses and negative equity. 

In its most recent quarterly consolidated financial statement, Vietnam Airlines attempted to explain its operating losses, noting that it has implemented a series of short- and long-term solutions during the past year to minimize damage caused by the COVID-19 pandemic.

It also declared that it was adding more capital and increasing its operational cash flow.

However, due to the slow recovery of the international aviation market, negative factors such as high fuel prices, ongoing global conflicts, and increased fluctuations in exchange and interest rates, the national carrier continued to suffer losses in both the fourth quarter and the whole of 2022.

Nonetheless, Vietnam Airlines expressed its belief that the global aviation market would gradually recover from the last quarter of 2022 and that the firm will have a better 2023.

Vietnam Airlines has decided to completely restructure itself for the 2021-25 period in a move that was approved by shareholders and relevant agencies. 

“The corporation believes that its business activities have gradually stabilized and is preparing for recovery and development in the near future,” the airline claimed.

HVN now trades at around VND13,200 ($0.56) per share, down 11 percent just this month.

In January 2022, HVN was trading at VND27,300 ($1.16) per share.

Established in 1995, Vietnam Airlines has 19 subsidiaries and two affiliates.

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The Ho Chi Minh City Stock Exchange (HoSE) on Thursday warned that Vietnam Airlines (HVN) could be delisted if an audit proves the company has logged an operating loss for three consecutive years.

In its warning, the HoSE cited the firm’s consolidated financial statement for the last quarter of 2022 in which Vietnam Airlines posted an accumulated loss of nearly VND34.2 trillion (US$1.46 billion) in 2022. 

The carrier also reported that its equity was negative VND10.2 trillion ($435.4 million) last year.

According to the Law on Securities, the stock of a public company must be delisted if it suffers annual operating losses for three consecutive years, if its accumulated losses exceed its charter capital, or if its equity is negative.

As such, if Vietnam Airlines’ audited consolidated financial statement for 2022 shows a loss, it will be the firm’s third consecutive year of operational losses and its ticker will be delisted, the HoSE warned. 

On June 1, 2022, the HoSE issued a decision to put HVN into ‘under control’ status after the firm released a report on its accumulated losses and negative equity. 

In its most recent quarterly consolidated financial statement, Vietnam Airlines attempted to explain its operating losses, noting that it has implemented a series of short- and long-term solutions during the past year to minimize damage caused by the COVID-19 pandemic.

It also declared that it was adding more capital and increasing its operational cash flow.

However, due to the slow recovery of the international aviation market, negative factors such as high fuel prices, ongoing global conflicts, and increased fluctuations in exchange and interest rates, the national carrier continued to suffer losses in both the fourth quarter and the whole of 2022.

Nonetheless, Vietnam Airlines expressed its belief that the global aviation market would gradually recover from the last quarter of 2022 and that the firm will have a better 2023.

Vietnam Airlines has decided to completely restructure itself for the 2021-25 period in a move that was approved by shareholders and relevant agencies. 

“The corporation believes that its business activities have gradually stabilized and is preparing for recovery and development in the near future,” the airline claimed.

HVN now trades at around VND13,200 ($0.56) per share, down 11 percent just this month.

In January 2022, HVN was trading at VND27,300 ($1.16) per share.

Established in 1995, Vietnam Airlines has 19 subsidiaries and two affiliates.

Like us on Facebook or  follow us on Twitter to get the latest news about Vietnam!

Source: https://tuoitrenews.vn/news/business/20230203/vietnam-airlines-risks-stock-delisting/71286.html

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Vietnam Tech unicorn VNG record a loss of over $56 mln in 2022

In 2022, VNG lost over VND1,315 billion ($56 million) after taxes. The undistributed after-tax profit of VNG, however, had still been greater than VND5,311 billion ($226 million) by the end of 2022.

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According to the financial report for the fourth quarter of 2022 from VNG Joint Stock Company (Code: VNZ), net sales climbed marginally by 6% to VND2,037 billion ($86.7 million) from the same quarter in 2021.

The gross profit margin increased to 45% in the fourth quarter of 2022 from 40% in the same quarter the previous year. 

This tech unicorn had a post-tax loss of over VND547 billion ($23.3 million) due to expenses depleting gross earnings, a substantial rise from the loss of VND267 billion ($11.3 million) during the same period. The fourth quarter of 2022 saw a VND435 billion ($18.5 million) net loss for VNG.

VNG’s cumulative net revenue in 2022 was 7,801 billion ($332 million), an increase of 2% from 2021. Since disclosing the information, the corporation has experienced a record loss after taxes of more than VND1,315 trillion ($56 billion). 

However, VNG had more than VND5,311 billion ($226.4 million) in cumulative unremitted after-tax earnings by the end of 2022.

With the above statistics, VNG fell short of its loss goal of VND993 billion ($39 million) for 2022 and only achieved 77% of the revenue forecast.

The entire assets of VNG exceed VND9,092 billion ($387 million) by the end of 2022, a decrease of less than 2% from the year’s commencement. Which accounts for one-third of total assets and is down VND2,000 billion ($85 million) from the start of the year. This technological group has VND3,079 billion ($131 million) in cash, cash equivalents, and bank deposits. VNG received interest on deposits totaling more than VND89 billion ($3.7 million) in 2022.

Besides, VNG also recorded VND1,484 billion ($63.2 million) of investment in affiliated companies and other units, 3.7 times higher than the first year. 

Only the investment in Dayone was profitable in the year, the rest of Rocketeer, Ecotruck, Beijing Youtu, Telio, and Funding Asia companies all lost, and VND1,000 billion  ($42.6 million) for the VNG Data Center project, this is the new data center with the largest rack scale in Vietnam, which has just been opened by VNG in mid-December, 2022.

By the end of 2022, the corporation had more than 7.1 treasury shares valued at more than VND1,264 billion ($53.9 million). All of these treasury shares will be offered by VNG to BigV Technology JSC for VND177,881 per share ($7.58).

Source: VietnamBiz

Source: https://e.nhipcaudautu.vn/companies/vietnam-tech-unicorn-vng-record-a-loss-of-over-56-mln-in-2022-3350413/

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