Dong A Plastic (DAG) continuously suffers losses, debt accounts for 98%, shares suspended from trading

6 consecutive quarters without bringing in a single penny of profit

Dong A Plastic Joint Stock Company (DAG), formerly Dong A Plastic Production and Trading Company Limited, has been present in the market since 2001 and is a famous brand in the production of plastic products used in the construction and advertising industries.

Since the beginning of 2023, DAG's business operations have gone through a terrible period with 6 consecutive quarters without bringing in a single penny of profit.

Dong A Plastic (DAG) has suffered losses for 6 consecutive quarters, equity has been eroded due to losses, remaining at just over 4% (Photo TL)

Specifically, DAG's loss period started in the first quarter of 2023, the company recorded revenue of VND 558.8 billion, loss after tax of VND 21.4 billion. The loss situation increased to its peak in the second quarter of 2023 with VND 102.7 billion.

In the last 6 months of 2023, DAG's revenue continuously plummeted, down to 213.8 billion and 30.7 billion VND respectively, DAG lost 16.2 billion and 22.3 billion VND respectively in these 2 quarters.

Entering 2024, DAG recorded revenue in the first quarter of 30.3 billion VND, with a loss after tax of 15 billion VND. Business results in the second quarter of 2024 were also not very bright, even worse than before. Revenue only reached 55.3 billion VND but cost of goods sold accounted for 81.1 billion VND, causing the company to have a gross loss of 10.7 billion VND.

In addition, pressure from interest expenses still accounting for 36.5 billion VND and business management costs of 4.3 billion VND caused DAG's after-tax loss to reach 66.6 billion VND.

Equity was almost completely eroded by losses.

Consecutive losses have caused Dong A Plastics to have major problems in maintaining capital for business operations.

At the end of the second quarter of 2024, the company's total assets were 1,394.8 billion VND. Of which, cash was only recorded at 843 million VND. Accounts receivable from customers were recorded at 298.9 billion VND and inventories accounted for 535.5 billion VND. In addition, fixed assets also accounted for 560.6 billion VND.

DAG's current capital structure is mostly from loans. Specifically, payables account for 1,367.6 billion VND, equivalent to 98% of total capital. Of which, short-term loans account for 733.6 billion VND, long-term loans account for 412.1 billion VND.

The original owner's equity was 603.1 billion, but due to continuous losses, it has been eroded to only 27.3 billion. This remaining equity is equivalent to just over 4% of the total capital. The reason is that the undistributed loss after tax recorded on the financial statements is up to 641 billion.

Dong A Plastic shares suspended trading

With recent poor business results, Dong A Plastics' shares have just been suspended from trading by the Ho Chi Minh City Stock Exchange (HoSE).

Previously, DAG shares were subject to trading restrictions from May 17, 2024 because the listed organization was 45 days late in submitting its 2023 audited financial statements compared to regulations.

On August 2, 2024, HoSE issued a letter reminding Dong A Plastics of its delay in disclosing information. Based on the continuous violations of information disclosure activities, HoSE has transferred DAG shares to the trading suspension list from August 15, 2024.

In addition, DAG was also put on warning because the auditing organization had an exception opinion on the company's 2023 financial statements and the undistributed profit after tax on the audited consolidated financial statements in 2023 was negative 588.1 billion VND.

In the stock market, DAG shares have continuously lost value over the past year. From the price of 3,100 VND/share at the beginning of 2024, at the session on August 9, 2024, DAG code was only 1,670 VND/share, equivalent to a loss of nearly half of its value.

Source: https://www.congluan.vn/nhua-dong-a-dag-lien-tuc-thua-lo-no-chiem-98-co-phieu-bi-dinh-chi-giao-dich-post307273.html