Many firms report big losses

The Vietnamese Ministry of Finance has finished the inspection over 90 companies in the country, which indicated a surprising result that most of large-sized enterprises reported negative losses from tens to hundreds of billions dong.

The losers operated in many different production business fields such as distribution, retailing, transportation, construction, health, gas, fertilizer and food.

In HCM City, among 21 inspected firms, only 3 were operating profitably namely Nguyen Kim Trading Joint Stock Co, Gemadept Corp and Saigon Co.op. Remaining firms suffered huge losses.

Among the losers, three posted real losses of 150-179 billion dong. Typically, a foreign retailer with a network of eight supermarkets and capital size of $120 million faced a loss of up to 190 billion dong in 2008. One year later, the loss was reduced to 154 billion dong.

The inspection in Dong Nai and Binh Duong provinces also showed that 25 firms all were unprofitable. In which, the biggest lower was a foreign invested enterprise. Another firm suffered a total loss of nearly 600 billion dong in two continuous years from 2007 to 2009.

In Hanoi, there were 19 firms being inspected, Ministry of Finance reported, only one did business profitably. It was Big C Thang Long supermarket services and international trade Co. Ltd, a FIE. Two companies in Can Tho, 2 in Da Nang and 1 in Binh Thuan underwent the inspection with a reported loss in 2 or 3 years, blamed on difficult economy situation, too high interest rates. However, the losses in FIEs raised a question.

The inspection was conducted by MoF after many National Assembly delegates complained that many FIEs reported “fake loss” but in fact they earned profit. The Minister Vu Van NInh also admitted that he find out many FIEs declared proper loss to repatriate profits to their homeland.

The minister told that the inspection had been finished. So, the agency basically could not offer assessment on situation and comments on the losses.

In 2009, the country had total 1,358 FIEs but 56% of which reported losses. However, the fact was that these firms had holding corporations in foreign countries and up to 99% of their produced commodities were exported to the third countries. – Vietbiz24

Tags: Vietnam companies, Vietnam enterprises