Vietnam Airlines borrowed nearly 18,800 billion VND to have cash flow to maintain operations in the months of declining revenue and negative profit because of the COVID-19 pandemic.
Business losses, negative business cash flow
Vietnam Airlines Corporation (Vietnam Airlines – Code: HVN) has just released its third quarter 2020 financial report showing net revenue of VND 7,602 billion, equivalent to only 30% of the same period in 2019.
Last quarter’s gross loss was VND 3,201 billion, in contrast to the gross profit of VND 3,308 billion in the third quarter of last year.
After subtracting all kinds of financial expenses, sales, business management,… Vietnam Airlines recorded a loss after tax of 3,997 billion dong while the same period last year, profit was 1,132 billion dong.
Accumulated 9 months, consolidated revenue of the corporation decreased 57% to 32,411 billion, consolidated after-tax loss is 10,676 billion.
In the context of two outbreaks of COVID-19 in our country and a heavy impact on air transport activities, the loss of business results of Vietnam Airlines has been forecasted.
Leadership of Vietnam Airlines has given an estimate of a consolidated loss of 10,750 billion VND in 9 months, not much different from the loss according to the recently announced report.
According to the Department of Aviation, Vietnamese airlines operated a total of 159,808 flights in the first three quarters of 2020, down 36.5% compared to the same period last year.
Vietnam Airlines operated over 64,400 flights, down 35.5%. Two other airlines under the same Vietnam Airlines Corporation also saw a decline in performance: Pacific Airlines flew more than 11,300 flights, down 59% and Vasco nearly 6,400 flights, down 34.6%.
Low-cost airline Vietjet operated nearly 58,500 flights, down 43%. Bamboo Airways is the only airline to record a 60% increase in flights to 19,219 flights.
The struggles and difficulties of Vietnam Airlines are also reflected in the negative cash flow from operating activities of 6,270 billion VND in the first 9 months of this year, contrary to the positive cash flow of 7,874 billion VND in the same period of 2019.
Cash flow from investing activities was unexpectedly positive with 3,149 billion dong thanks to debt recovery and resale of debt instruments from other organizations to receive 3,679 billion dong.
With financial activities, Vietnam Airlines spent VND 354 billion to pay dividends and profits to owners, VND 2,678 billion to repay finance lease principal and VND 12,982 billion to repay loan principal in the first 9 months of this year. . Along with that, this corporation also borrowed 18,794 billion dong. As a result, Vietnam Airlines has a positive financial cash flow of 2,780 billion VND in the first three quarters of 2020.
As of September 30 this year, this corporation has 2,618 billion dong and cash equivalents, down 11.5% from the first day of the year.
Assets decreased by tens of trillion dong in 9 months
The total assets of Vietnam Airlines as of the end of the third quarter were VND 62,370 billion, a decrease of more than VND 14,000 billion compared to the first day of 2020. The major decrease, about VND 10,000 billion, came from short-term assets such as term deposits, short-term receivables, inventories, Types of long-term assets such as receivables or fixed assets also dropped by about 4,000 billion.
On the capital side, the company’s liabilities only decreased by 3.6% to 55,760 billion dong. Short-term debt value was almost unchanged at around 31,400 billion dong. However, the composition of short-term debt is clearly different. As at the first day of this year, the majority of short-term liabilities were trade payables (more than 50%), followed by loans and finance lease (21%).
At the end of the third quarter, accounts payable to sellers only accounted for 31% of total short-term debt, while the proportion of loans and rental debt increased to 37%, equivalent to nearly 11,700 billion VND.
Due to a loss of nearly 11,000 billion dong in the three quarters of raging epidemic, the equity capital of Vietnam Airlines also shrank, from over 18,600 billion dong to about 6,600 billion dong.
The debt / equity ratio jumped from 3.1 times the first day of the year to 8.4 times on September 30, 2020.
Source: vietnambiz.vn – Translated by fintel.vn