DIGIWORLD: PROFIT AFTER TAX INCREASED BY 55% IN THE 2nd QUARTER AND CASH ON HAND REACHED VND 266 BILLION

Ho Chi Minh City, July 20th 2020, Digiworld Corporation (“DGW”) announced 2nd  Quarter result with a record high in quartely net revenue of VND 2,583 billion since its establishment, increasing 29% year on year and profit after tax reached VND 48 billion, increasing 36% year on year.

Thus, at the end of the first 6 months, Digiworld achieved VND, 4,894 billion in total net revenue and VND 93 billion in profit after tax, increasing 45% and 55% year on year respectively. With this business result, the company has completed 115% of the 6-month revenue plan and 123% of the 6-month profit plan, equivalent to 48% and 46% of the yearly plan.

Specifically, Digiworld’s business results in the 2nd quarter are as follows:

-      Laptops & tablets: There has been strong growth which helped revenue reach VND 1,080 billion, increasing 65% over the same period last year. COVID - 19 pandemic outbreaks made students absent from schools in a long term; Many agencies applied online working mode. Therefore, the demand for using technology equipment for online learning and working programs has increased, which helped to create a sharp rise in the consumption of technology products, such as tablets and laptops. Therefore, at the end of the first 6 months, Laptops & Tablet revenue was VND 1,871 billion, increasing 67% year on year and fulfilling 59% of the year plan.

-      Mobile phones: Turnover reached VND 1,146 billion, increasing 19% over the same period last year. Thus, after 06 first months of the year, this segment reached VND 2,288 billion of revenue, up 48% year over year, completing 47% of the annual plan. Although the impact of the COVID - 19 pandemic reduced the consumption of the mobile phone segment, Digiworld still achieved an 18% growth rate thanks to effective market development activities for the Xiaomi brand. Therefore, Xiaomi’s market share also increased continuously, reaching more than 10% in the market.

-      Office equipment: Turnover reached VND 298 billion. By the end of the first 6 months, office equipment earned VND 613 billion, up by 4% year over year and fulfilling 36% of the year plan.

-      Consumer goods: Turnover reached VND 59 billion. after 6 first months, this segment’s revenue reached VND 122 billion, increasing 4% year over year and fulfilling 36% of the year plan.

Unit: (VND Biliion)

Net revenueQ2/2020Q2/2019YoY6M20206M2019YoY% Plan
Laptop & Tablet108065465%18711,12167%59%
Mobile Phones114696719%22881,55148%47%
Office equipment298322-7%6135894%36%
Consumer Goods5963-6%1221165%24%
Total 2,5832,00629%4,8943,37745%48%
Profit after tax48.135.336%936055%46%

After the 2nd  quarter, Digiworld’s business performance has been also shown:

-      Cash and cash equivalents: quarter-end balance reached VND 266 billion.

-      Operating ratios: After the 2nd  quarter, Digiworld’s performance indicators were at the best level. Specifically, the number of receivable days is currently only 26 days, gradually decreasing compared to the same period: 34 days (2nd quarter of 2019) and 35 days (2nd quarter of 2018). This improvement showed the effectiveness of collecting money policy with agents and customers. At the same time, thanks to the high performance in Laptops & Tablets and Mobile Phone segments, the number of inventory days was also lower (35 days) than in the 2nd quarter of 2019 (45 days). Besides, payable days tended to increase to reach 15 days, which proved the position and prestige of Digiworld in the role of a Distributor with suppliers. This makes Digiworld’s inventory turnover faster but still ensures adequate inventory for the next quarter when import contracts have been signed and Digiworld’s partners have returned to work after the pandemic.

Profitability ratios: By the end of the 2nd quarter, the profitability ratios have been improved. Accordingly, Digiworld was managing cost efficiently, gross profit margin and net profit improved, reaching 6.7% and 1.9% compared to 6.2% and 1.8% of the same period in 2018.

Capital structure: Thanks to the effective business performance, Digiworld has got the safest loan/equity structure (down to 0.51) in the 2nd quarter.

With this result, Digiworld is still speeding up to complete the year plan with the target of VND 10,200 billion in revenue, VND 202 billion in profit after tax (increasing by 20% and 25% respectively compared to business results in 2019).

Attachement: Consolidated financial statements for Quarter II/2020