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Licogi suffers losses and difficulties in debt repayment

Tuesday - 19/02/2019 18:20
Solvency of Licogi currently depends on its inventory sales and debt recovery.
The Ministry of Finance has just sent reports to related units about the financial situation and production and business efficiency of Licogi Corporation in 2017 and the first half of 2018 with poor business indicators.

Accordingly, in 2017, the company's revenue reached VND 2,721 billion, but the profit before tax was negative VND 58.7 billion. In the first 6 months of 2018, revenue also reached 1,313 billion dong but profit was only 9.8 billion dong. Profit after tax on average total assets was only 0.08%. The loss-making business results in 2017 led to the capital preservation ratio of the parent company as well as the corporation, respectively, reaching only 0.83 and 0.79.

"The above results show that the Corporation has not preserved state investment capital, the revenue of the parent company and the corporation in 2017, the first half of 2018 decreased compared to the same period last year", the Ministry of Finance evaluated and propose the Ministry of Construction to direct the representative herein to report the causes and solutions.

The Ministry of Finance's report also pointed out that the parent company - Licogi Corporation is having difficulties in paying due debts, especially debts with a term of less than 3 months, due to short-term principal assets is receivable and inventory, the cash and cash equivalents at 30/6/2018 are only about VND 40 billion.

The Ministry of Finance also reiterated, the auditing company once noted, as at December 31, 2017, the total short-term debt of the Corporation - the parent company exceeded the short-term assets of 1,232 billion dong. "These events, along with other issues, show the existence of an uncertain element of the Corporation's continued operation - the parent company," the Ministry of Finance's report cited.

Accordingly, the agency also stated that the solvency of the corporation as well as the parent company depends heavily on the sale of inventory and debt recovery. Investment activities of enterprises also achieved a very low return on investment value, only 3.06%.

Licogi Corporation is an enterprise operating mainly in the field of construction and installation of foundations and infrastructures established in 1960, directly under the Ministry of Construction. Licogi used to build many hydroelectric, thermoelectric, industrial, civil, transport, irrigation, airport and port facilities ... which have important political, economic and defense significance. ... Licogi is also known as a general contractor.

Licogi has been equitized and operated as a joint stock company from January 1, 2016. However, since then, Licogi has been ineffective, accumulated losses have reached over VND 530 billion. In order to clarify the financial status at the enterprise, the corporation invited auditors to review the books.

At the end of 2018, the Ministry of Construction transferred the ownership of state capital in Licogi to the State Capital Investment Corporation (SCIC). Accordingly, the value of state investment in Licogi transferred to SCIC was VND 366.4 billion, accounting for 40.72% of charter capital.

Author: Translated by CoPhieuViet.Com

Source: Vnexpress newspaper

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