HCM CITY — Confectionery giant Kinh Do Corp (KDC) posted a surprise loss of over VND39.2 billion (US$1.9 million) in the second quarter of this year, a poor performance compared to a profit of VND318 billion ($15.1 million) in the first three months.
|A Kinh Do Bakery pavilion at a trade fair in HCM City. Kinh Do reported a surprise loss in the second quarter due to damage caused by the sale of its stake in Nutifood. — VNA/VNS Photo The Anh
First-half profits totalled VND278.5 billion ($13.3 million).
The loss was attributed to damage caused by the sale of its stake in domestic dairy producer Nutifood during the period. The company announced it had sold its remaining 2.7 million shares, or 18 per cent stake, in Nutifood.
Specific figures have not been disclosed.
Kinh Do Corp said after five years of investment, development strategies between KDC and Nutifood were no longer going in the same direction, and the company had decided to withdraw its investment.
In 2007, KDC bought 3.7 million shares in Nutifood, equivalent to a 24.8 per cent of the company's total shares. However, in 2008, Nutifood posted a heavy loss of VND148 billion ($7 million) and total profit from 2009-11 reached just VND141 billion ($6.7 million). After that, KDC sold 1 million shares.
KDC's shares have fallen for the past two days following the announcement, but closed yesterday unchanged at VND38,500 ($1.83).
In the second quarter, KDC's revenue decreased 20.4 per cent from the first three months to VND408.3 billion ($19.4 million), lifting its first-half revenue to VND787 billion ($37.5 million), down 6.7 per cent year-on-year.
Revenue from financial operations rose 61 per cent to over VND32.1 billion ($1.5 million) from April-June, but financial costs also jumped to over VND66 billion ($3.1 million) during that period. At the end of June, KDC's short-term debts stood at VND273 billion ($13 million). — VNS