Retailer Mobile World Q1 profit rises 43 times after reshuffle

Mobile World Investment Corporation (MWG) reported an after-tax profit of nearly VND903 billion ($35.63 million) in the first quarter of 2024, a 43-fold increase year-on-year, according to the company’s financial statements.

The Vietnamese retail giant, listed on the Ho Chi Minh Stock Exchange as MWG, posted after-tax profit of VND21 billion ($895,600) in Q1/2023, down 99% year-on-year.

Mobile World has regained the quarterly profit highs of nearly VND1 trillion as in the 2019-2020 period, thanks to its restructuring efforts from Q4/2023. This was the firm’s most effective business quarter since Q3/2022.

The company recorded revenue of about VND31.5 trillion ($1.24 billion) in Q1/2024, up over 16% year-on-year. Of which, revenue from financial activities expanded 63% to more than VND585 billion ($23.08 million), mainly from deposit interest.

However, financial costs increased due to the exchange rate difference by more than VND102 billion ($4 million). Sales and business management costs also surged.

This year, Mobile World is aiming to increase revenue by only 5% to VND125 trillion ($4.93 billion), while its profit is expected to be 14 times higher than 2023, reaching VND2.4 trillion ($94.7 million).

In Q1 of this year, the company completed 25% and 37.6% of its respective revenue and profit plans.

Its leadership said that despite lingering caution of purchasing durable and high-value products such as phones and electronics, its chains Mobile World (mobile phones) and Dien May Xanh (electric and electronic home appliances) still recorded increased revenue and improved gross profit thanks to greater contributions from electronic products.

Revenue from food, fast-moving consumer goods and pharmaceutical products grew by 40% thanks to measures to increase existing stores’ revenue and the shifting shopping trend from traditional to modern channels, especially among young customers.

"The strong increase in profit was the result of comprehensive restructuring efforts since the fourth quarter of 2023. Mobile World’s policy is to make all business and operational activities streamlined and efficient, and to strengthen its internal strength,” the leadership explained.

With the above orientation, in the first three months of this year, Mobile World laid off 4,853 employees, marking one of its biggest layoffs so far and equivalent to 56% of the figure in the whole year 2023. Last year, the firm cut 8,594 jobs.

Since the start of its reshuffle in Q4/2023, Mobile World has laid off 7,813 employees. As of end-March, it recorded more than 60,500 employees, the lowest since 2020.

In parallel with the personnel cuts, many leaders continued to receive zero salary in Q1/2024, including chairman Nguyen Duc Tai; CEO Tran Huy Thanh Tung; and Doan Van Hieu Em, CEO of Mobile World and Dien May Xanh chains.

Mobile World closed Friday at VND54,900 ($2.17) per share.