Ho Chi Minh City, October 20, 2020, Digiworld Corporation (DGW) announces VND3,624 billion in revenue, and VND75 billion in profit after tax for 3rd quarter 2020, a year-on-year increase of 39% and 44%, respectively.
Accordingly, by the end of first 9 months of 2020, Digiworld’s revenue was VND8,518 billion, and profit after tax was VND 168 billion, a year-on-year increase of 42% and 50%, respectively. This means the firm has achieved 84% revenue target and 83% profit goal for the year 2020 by the end of third quarter. Individual categories recorded outstanding growth in the first 9 months against annual business plan. In particular:
- Laptop and Tablet:Digiworld reported VND 1,280 billion in revenue for third quarter of 2020, increasing by 13% year-on-year. This means the firm has achieved 2020 revenue target by the end of first nine months, with VND 3,151 billion. Despite shrinking laptop & tablet share of wallet, Digiworld’s revenue of this category is still growing. This shows that the firm is establishing strong presence in this market.
- Mobile phone: Revenue of this category for third quarter of 2020 is VND 1,868 billion, a year-on-year increase of 84%. This means the firm has achieved 86% of 2020 revenue target by the end of first nine months, with VND 4,156 billion. This growth was driven by Xiaomi brand as the market share increased steadily over the quarters. In addition, Apple has made certain contribution to Digiworld’s mobile phone sales since Q3 2020.
- Office Equipment: Revenue of this category for third quarter of 2020 is VND 414 billion, a slight year-on-year increase of 02%. This category reported a modest growth in the third quarter as the demand for office equipment continued to decline due to COVID-19 as well as the working from home trend. Therefore, the firm has achieved 60% of 2020 revenue target for office equipment category by the end of first nine months, with VND 1,027 billion.
- Consumer Goods: Consumer goods category declined in third quarter of 2020 and earned VND 62 billion in revenue. This equates a negative growth of 06% over the same period due to the COVID – 19 epidemic, which urged Digiworld to suspend implementation of new FMCGs contracts. Despite insignificant revenue contribution of this category, Digiworld still has high expectations for its potential.
Details of Digiworld’s Q3 2020 business performance:
Unit VND billion
|Net Revenue||Q3 2020||Q3 2019||YoY||09M2020||09M2019||YoY||%plan||2020 Plan|
|Laptops and tablets||1,280||1,129||13%||3,151||2,251||40%||100%||3,150|
|Profit after tax||75||52||44%||168%||112||50%||83%||202|
Behind the said growth achievements are the vision, effective strategy, and strong governance foundation of Digiworld’s Board of Directors. Digiworld always takes initiative against market developments, with focus on risk management and governance of business lines. For a service company like Digiworld, logistics and finance are the topics that require strong governance. Therefore, since the 2000s, Digiworld has implemented SAP’s ERP management system, and is now proud to be one of the Vietnamese businesses that successfully runs SAP’s standard ERP system. This event brings Digiworld to a new level in cost optimization, financial transparency, continuous and independent update of reporting data.
Moreover, ICT product distribution business model and enhanced cost management capabilities, Digiworld’s Q3 2020 cash flow increased to VND 212 billion, significantly higher than same period of 2018 with VND 39 billion and in 2019 with VND 69 billion.
In addition, Digiworld constantly improves management of working capital. This is a prerequisite to the development of distribution business that Digiworld is running. In the third quarter of 2020, Digiworld reports breakthroughs in capital management and debt policy change decisions. This has significantly improved Digiworld’s receivable period from 22 as opposed to 31 days same period of 2019.
Digiworld’s also reports a record decrease in inventory period, from 36 days in Q3 2018 to 33 days in Q3 2019 and now 24 days in Q3 2020. This proves that Digiworld’s inventory cycle has improved steadily over time and indicates that Digiworld is selling faster. This has encouraged Digiworld’s suppliers to loosen debt policies over the years, enabling Digiworld to control cash flow better.
In addition, restructuring corporate management cost system has resulted in Digiworld’s positive profitability ratios. Accordingly, net profit margin improved from 1.9% in Q3 2019 to 2.1% in Q3 2020, so Digiworld’s net profit of first 9 months of 2020 increased by 56 billion over the same period.
Thanks to the Board of Directors’ efforts in maintaining strong cost management, robust growth and safe debt structure, shareholders benefit from better return on assets and return on equity. Particularly, the firm’s Q3 2020 ROE is a record 7.1%, as opposed to 5.7% Q3 2019. In addition Along with that, thanks to effective operating activities and capital management, in Q3 2020, Digiworld’s capital structure was down to 45% from 67% in Q3 2019, enabling higher retained earnings added to equity. This indicates Digiworld’s stronger capital structure that increases shareholders and investors value.
Therefore, Digiworld successfully concludes the first 9 months of 2020 with outstanding business performance and effective financial indicators and completes 2020 business targets set out at the beginning of the year. In particular, determined to build a Sustainable Development enterprise, Digiworld always emphasizes the economic, environmental and social aspects based on the firm’s 3C strategy: Cơ sở (Foundation) - Con người (People) - Cơ hội (Opportunities). Of these three elements, “People” is fundamental to build on opportunities; “Foundation” entails a strong financial foundation and a clear management process; and “Opportunities” requires capturing new opportunities for Digiworld to dominate the market. Digiworld’s 3C strategy is a solid foundation to realize Digiworld’s strategies in the coming years.