Sunday , May 26 2024

Tumbling stock market makes a dent in company earnings

Investment in securities, a major source of income for many companies during the two years of Covid-19, has become a financial burden this year after markets plunged.

Da Nang Housing Investment Development reported losses of over VND90 billion ($3.85 million) for the first six months “due to negative market factors,” it said in its earnings report.

Last year it reported profits of VND130 billion from stock trading.

The VN-Index has fallen by over 20 percent this year due to geopolitical tensions and rising inflation.

Mining company Hoa An said its profits dropped by 90 percent year-on-year to VND2 billion in the second quarter following a mark-to-market decline of over VND20 billion in steelmaker Hoa Phat Group’s stocks.

HPG has been hovering around a 17-month low as steel prices dropped due to declining construction activity and a surge in costs.

At the end of June Hoa An was holding over 2.5 million HPG shares.

Construction firm Licogi 14 said it had to mark to market its “financial investment” in the previous quarter.

It lost over VND346 billion during the quarter though revenues from its main businesses soared by 45 percent to VND88 billion.

Seafood processor Vinh Hoan Corporation invested VND200 billion in stocks in the second quarter but made mark-to-market losses of nearly VND63 billion.

Its main business thrived meanwhile with revenues jumping by over 80 percent year-on-year to VND4.22 trillion.

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