Conglomerate Thaco sees 6% drop in H1 net profit on weak demand

Vietnamese private conglomerate Thaco Group posted VND1.01 trillion ($40.6 million) in net profit in the first half of this year, down 6% year-on-year and equivalent to 37% of the whole-2023 figure, according to its report filed to the Hanoi Stock Exchange.

Since 2023, Thaco’s profit has sharply declined due to a struggling auto market and increasingly fierce competition. In the two years prior, its annual profit had exceeded VND5 trillion ($201 million).

In his message sent to all employees early this year, Thaco Group’s chairman Tran Ba Duong described 2024 as another year marked by significant economic difficulties, challenges, and weak demand, similar to 2023. However, the company expects a slight increase in consumption in the second half of the year.

As of June 30, Thaco Group owner's equity reached VND54.26 trillion ($2.18 billion), rising by VND4 trillion ($160.8 million) from the previous year. Its liabilities hit VND132.93 trillion ($5.34 billion).

The company currently holds four batches of bonds valued at VND13.5 trillion ($542.7 million). Since the beginning of the year, Thaco has paid VND208 billion ($8.36 million) in interest on these bonds.

As of end-Q2, Thaco’s total assets stood at VND187.19 trillion ($7.5 billion), behind Vingroup with VND722.26 trillion ($29.04 billion) and steel major Hoa Phat with VND206.6 trillion ($8.3 billion).

Thaco Group has six member units: Thaco Auto, Thaco Industries, Thaco Agri, construction and investment-focused Thadico, commerce and service arm Thiso, and logistics provider Thilogi. Thaco Auto is the group’s largest revenue earner.

This year, Thaco Auto aims to sell 95,400 automobiles and export over 1,600 units. It targets VND68.4 trillion ($2.7 billion) in consolidated revenue in 2024.