Chuong Duong Beverage Joint Stock Company's (Chuong Duong Sarsaparilla) Q2 financial report recorded revenue of nearly 48 billion VND, more than 1.5 times higher than the same period last year. While the beverage segment contributed about 70%, the remaining revenue primarily came from real estate rentals.

Chuong Duong Sarsaparilla reported a gross profit of 18 billion VND, achieving triple-digit growth compared to the same period. However, interest expenses continued to erode profits. After all expenses, the company incurred a net loss of more than 6 billion VND, extending its losing streak since early 2021.

Although still unprofitable, Ms. Nguyen Thuy Phuong, the company director, noted that the results "significantly improved", with the loss being only one-fourth of that in the same period last year. In an explanation letter sent to the Hanoi Stock Exchange, she attributed this improvement to the resurgence of both the beverage and warehouse rental segments, coupled with enhanced cost management and operational efficiency.

For the cumulative half-year, Chuong Duong Sarsaparilla reported revenue of 112 billion VND and an after-tax loss of 17 billion VND, both showing more positive results compared to the first half of last year. According to Ms. Phuong, the company is continuing its restructuring efforts to improve production and business efficiency, gradually overcome accumulated losses, and return to profitability soon.

Chuong Duong Sarsaparilla on a supermarket shelf. Photo: Phuong Dong

Chuong Duong Sarsaparilla aims for revenue this year to be nearly 1.5 times that of last year, reaching 228 billion VND, but anticipates a continued loss of 74 billion VND. According to management, the domestic beverage market grows by an average of 5-6% annually. Healthy, low-sugar or sugar-free beverages are the product categories benefiting most from changing consumer trends. However, the company currently lacks the capacity to develop these product lines.

Management also expressed concerns that the Middle East conflict could increase input costs, including raw materials and logistics. Consequently, the gross profit margin for the beverage business continues to be eroded. Furthermore, limited cash flow hinders debt repayment capabilities, potentially leading to a surge in financial costs compared to previous years.

Earlier this year, the Board of Directors stated that total losses of 350 billion VND over five years necessitated timely decisions to improve the company's financial capacity and cash flow autonomy. The company had planned to transfer the Nhon Trach 3 factory and related assets (including the Saxi brand) to a foreign partner. They set certain conditions for the buyer, including an immediate payment of 35% of the transfer value upon contract signing, to sustain operations and avoid bankruptcy. However, this deal was not executed as it was not approved by the general shareholders' meeting.

As of the end of Q2, Chuong Duong Sarsaparilla's total assets amounted to nearly 600 billion VND. Liabilities increased to nearly 770 billion VND, primarily consisting of loans from the parent company.

Phuong Dong