In the first quarter of 2022, Vietnam Airlines saw a net loss of VND2.6 trillion ($104 million), causing the national airline to face the ninth consecutive loss and face the risk of being delisted, according to Nikkei Asia.
Although the profit in the first quarter of the year increased by 55% to more than VND11.6 trillion, Vietnam Airlines still suffered a loss because its expenditures exceeded its revenues.
The Ho Chi Minh City Police newspaper on May 23 wrote that the aviation industry can be considered a very fast recovery after the Covid-19 pandemic, with busy passengers on domestic flights. From the Lunar New Year (early February) until now, ticket prices have sometimes increased “to the ceiling.” However, the financial report of Vietnam Airlines recently showed huge “loss” numbers.
The parent company’s expenses in the first quarter of 2022 increased by 23.9%, equivalent to an increase of VND 2,093 billion compared to the first quarter of 2021, the Vietnam Economic Review reported.
The lingering impact of the pandemic, coupled with higher fuel costs due to the impact of the Russia-Ukraine war, have dented the airline’s business.
Existing risk of delisting
According to Vietnamese media, a company is at risk of being delisted from the Ho Chi Minh City Stock Exchange if its net loss is three consecutive years or if the accumulated loss exceeds its charter capital for the whole year.
Vietnam Airlines recorded a loss for two consecutive years in 2020-2021. As of March 31, its accumulated loss was VND 24.5 trillion, exceeding its charter capital by about VND 2,160 billion.
The national airline has not yet commented on the possible delisting but is expected to discuss the matter with regulators.
“With the expected recovery speed and management and administration solutions being actively deployed, Vietnam Airlines can basically maintain its liquidity until the end of the year,” VNExpress quoted a Vietnam Airlines leader as saying.
The late release of information
Under current regulations, a company must disclose quarterly financials within 30 days of the end of the reporting period.
But Vietnam Airlines announced the numbers for the first quarter of 2022 on May 20, nearly 3 weeks past the deadline. The airline said some employees and accountants have been infected with Covid-19 and need to be isolated, according to Nikkei Asia.
According to Tuoi Tre newspaper, the recent “late reporting” has many opinions as a “suspect” move, because if the stock “sticks” to the information of being delisted, it will be very difficult to trade and often fall into a bad state of lying on the floor.
A representative of the Securities Commission told Tuoi Tre that Vietnam Airlines’ delay in submitting financial statements was not complying with the regulations of Circular 96 in 2020 of the Ministry of Finance. “We continue to urge Vietnam Airlines to soon announce timely information.”
International visitors recover slowly
Vietnam has continuously applied strict blockade measures since the Covid-19 pandemic began in 2020 and has only officially opened to international tourism on March 15, 2022.
However, the number of visitors from China, Korea, and Japan markets recovered very slowly.
As international flights account for a significant proportion, Vietnam Airlines has been struggling to manage its financial situation.
At the end of September last year, the national airline got rid of negative equity after adding nearly VND8 trillion dong by issuing nearly 800 million more shares to existing shareholders.
The Vietnamese government owns nearly 90% of the shares of Vietnam Airlines, ANA Group (Japan) accounts for 5.6%, and the rest are some other small shareholders.
Thoibao.de (Translated)
