Retail major Mobile World sees 96% plunge in Q3 profit

Vietnam’s Mobile World Investment Corporation (MWG) has posted after-tax profits of VND38.7 billion ($1.57 million) in the third quarter of 2023, down 96% year-on-year.

Its Q3 financial statement shows that the corporation recorded revenues of nearly VND30.3 trillion ($1.23 billion), 5% lower than the same period last year.

MWG leaders have attributed the results to weak demand for phones and electronic products amid economic instability and the restructuring of the corporation’s Bach Hoa Xanh grocery store chain.

"During this period, the company offered many promotions and accepted reduced gross profit margins to attract customers and maintain revenue," it noted.

MWG said that despite lower purchasing power, it was able to sell 18,000 iPhone 15s in September, earning nearly VND600 billion ($24.4 million) in revenue.

Along with iPhone, the Mobile World (mobile phones) and Dien May Xanh (electric and electronic home appliances) chains recorded good sales in phones and laptops during the back-to-school season. This boosted September revenues to VND7.2 trillion ($292.8 million), an increase of 7% compared to August and the highest since June.

In addition, the MWG ecosystem has begun to reap post-restructuring benefits from the Bach Hoa Xanh chain. The revenue that this retail chain of food and essential consumer goods earned in the first nine months of the year was nearly VND22.3 trillion ($947.5 million), up 12% over the same period and contributing nearly 26% of MWG’s total revenue, higher than the Mobile World chain.

Bach Hoa Xanh posted an after-tax loss of nearly VND250 billion ($10.17 million) in Q3, lower than previous quarters; and VND905 billion ($36.8 million) in nine months, much lower than nearly VND3 trillion ($122 million) in the same period of 2022.

MWG has started recruiting more workers of late. The number of employees at the end of September was nearly 68,400, 350 more than Q2.

The group had cut nearly 6,000 employees from its workforce in Q1/2023 to over 68,000.

For this year, Mobile World has targeted revenues and after-tax profits of VND135 trillion ($5.75 billion) and VND4.2 trillion ($179 million), up 1% and 2% year-on-year, respectively.

The plunge in Q3 profits saw MWG share hit its floor price Wednesday at the Ho Chi Minh Stock Exchange to close at VND35,100 ($1.43), the lowest in 34 months.