Con Cung’s H1 2019 post-tax profits fell 84 percent over last year to VND1 billion ($43,000), according to its latest financial report.
In the first six months of this year, net revenues for Con Cung, which owns the largest mother and baby store chain in Vietnam, rose 37 percent year-on-year to VND1.02 trillion ($44 million).
However, a sharp increase in expenses, especially the cost of goods sold which came up to around 25 percent of revenue, and a surge in financial costs drove after-tax profits of the corporation down.
Cost of goods sold during this period rose to VND255 billion ($11 million) from VND173 billion ($7.45 million) last year, while financial expenses rose to VND14 billion ($603,000) from VND6 billion ($258,000). Payments to staff and outsourcers also rose signficiantly, Con Cung management said.
As of June 30, the company had a total capital of approximately VND900 billion ($38.75 million), with liabilities accounting for over 77 percent.
In the first half of the year, the company incurred new long-term debt of nearly VND100 billion ($4.3 million) from bonds issued to supplement working capital and expand production.
According to a previous disclosure, Con Cung plans to have 1,000 stores within the next three years and annual revenues of VND10 trillion ($431 million). It currently has 400 stores in 45 provinces and cities.