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How did FLC Group do business before Trinh Van Quyet was arrested?

After peaking in revenue and profit in 2015-2019, FLC’s business results have decreased continuously for the last 2 years when the Covid-19 epidemic broke out.

As one of the largest tourism real estate developers in the domestic market, and the owner of Bamboo Airways, the outbreak of Covid-19 has directly affected business results in the past 2 years. the latest year of FLC Group Joint Stock Company (FLC).

Specifically, before translating Covid-19 appeared, FLC is in the period of continuous growth in revenue and profit targets. Accordingly, the revenue of this group increased continuously from 2009 to 2019 (before the Covid-19 epidemic appeared), from several tens of billions of dong/year before 2010, to a peak of 15,780 billion dong in 2014. 2019.

Also in the period 2015-2019, FLC reached the peak of profit target with the first time reaching over trillion VND in 2016. In the following years, with the revenue of over tens of trillion VND per year, FLC’s profit brought back. for their bosses all reach 500 billion/year.

Growth momentum is blocked

However, when the Covid-19 epidemic appeared, FLC was in the group of businesses that were directly affected when both the aviation and tourism industries were affected, leading to a sharp drop in business results in the last 2 years (2020- 2020). 2021).

In the past year 2021, this tourist real estate developer only recorded VND6,772 billion in net revenue, down half compared to 2020. In the previous 2020, the consolidated revenue of this group and companies subsidiary also decreased by 15%.

The reason for the decline in FLC’s revenue came from all business segments, from real estate; trading in goods, equipment and building materials; to service areas such as resorts, tourism, golf, aviation…

In addition, one of the reasons for FLC’s revenue in 2021 to drop sharply is that the group has reduced its ownership rate at Bamboo Airways to less than 50% from February 2021, leading to no longer being the parent company and This airline’s financial statements may not be consolidated.

However, thanks to no longer accounting for business results of the aviation segment, FLC’s gross profit margin in 2021 has improved significantly, helping the business to record a gross profit of VND 413 billion, while in 2020 the company has a loss. combined more than 3.172 billion.

However, in 2021, FLC’s financial income decreased by more than 73%, bringing in only VND 1,463 billion. This is the main reason why this group’s profit after tax is only nearly 84 billion VND, down 73% respectively compared to 2020.

According to FLC’s management, most of the company’s financial income comes from restructuring investments and transferring capital at member companies. In 2020, this activity was used by the company to offset and maintain production and business activities.

This is also the main source of revenue to help FLC cover losses from main business activities and be profitable in 2020.

While still recording a positive profit, FLC’s 2021 revenue fell to its lowest level since 2016, while net profit fell to its lowest level since 2012.

How did FLC Group do business before Mr. Trinh Van Quyet was arrested?-1

Many investments are losing money

With the direct impact from the Covid-19 epidemic, many investments in stocks, subsidiaries and affiliates of FLC are suffering losses, causing the group to have to make provisions of over trillion.

Specifically, by the end of 2021, this group has 2 investments in shares of 2 enterprises in the “FLC ecosystem”, AMD (FLC Minerals) and HAI (HAI Agro-pharmaceuticals) with a total value of nearly 265 billions dong. In which, the investment in HAI alone is nearly 261 billion. However, FLC had to make a provision of nearly VND74 billion with this investment because the fair value of HAI shares was lower than the cost of the investment group.

Similarly, by the end of 2021, FLC has invested more than VND 5,320 billion in capital contribution to subsidiaries, but also has to make provision of more than VND 891 billion.

In which, most of the subsidiaries are investors and operators of the golf course and resort chain of this group, which are experiencing losses, causing the parent group FLC to make provisions, such as FLC Samson Golf & Resort Co., Ltd. invest 800 billion, but have to reserve 443 billion dong; FLC Hotel and Resort Management One Member Limited Liability Company invests 200 billion, has to reserve 90 billion; FLC Quy Nhon Golf & Resort Joint Stock Company invested VND 1,050 billion, had to reserve 16 billion; FLC Ha Long Investment and Development Co., Ltd invests 500 billion, has to reserve 334 billion…

In addition, a number of investments in FLC’s affiliates are also having to make provisions, the largest of which is an investment of 4,015 billion VND in Bamboo Airways, which has a provision of 388 billion VND.

At FLC, Mr Trinh Van Quyet is still the most influential person in the role of Chairman of the Board of Directors. Mr. Quyet is also the largest shareholder in this tourist real estate developer.

By the end of 2021, Mr. Quyet holds a total of 215.4 million FLC shares, equivalent to 30.34% of the company’s charter capital. Meanwhile, his family members no longer hold any shares of FLC.

In early January this year, Mr. Quyet sold 74.8 million FLC shares. However, these transactions were carried out without reporting to the regulator or disclosing information, so HoSE canceled the transaction and forced refunds to investors who reciprocally bought FLC shares from their accounts. Mr. Quyet sold.

After this event, the securities regulator also suspended securities trading activities for 5 months with Mr. Trinh Van Quyet. To date, Mr. Quyet is still the largest shareholder in this group with nearly one third of the total outstanding shares.

According to Zing

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