June 16, 2023 4:01 PM GMT+7
VinFast
electric vehicles are parked before delivery to their first customers at a
store in Los Angeles, California, U.S., March 1, 2023. REUTERS/Lisa Baertlein/File
Photo
HANOI, June 16 (Reuters) -
Vietnamese electric vehicle (EV) maker VinFast has reported a drop in
first-quarter revenue by 49%, with a net loss deepening to $598 million in the
first full reporting period since it started exporting to the United States.
VinFast made the disclosure in a
filing late on Thursday with U.S. securities regulators as it looks to complete
a merger with a blank-check company next month that will value the automaker at
$23 billion.
The quarterly net loss compared with
a loss of $411 million in the same period a year earlier. In 2022, VinFast lost
$2.1 billion.
It attributed the quarterly
revenue decline, to almost $84 million, to lower selling prices and its
phase-out of internal combustion vehicles as it pivoted to become a dedicated
EV maker.
The automaker, which had filed
earlier for a U.S. initial public offering, announced last
month it would go public through a merger with special purpose acquisition
company (SPAC) Black Spade Acquisition Co .
VinFast and Black Spade target
completion of the merger by July 20, they said in Thursday's filing.
The VinFast valuation was based
on Black Spade's determination that VinFast was comparable with EV maker
Lucid (LCID.O) "given their similarity in revenue
scale and shared global target market with a near-term emphasis on U.S.
sales."
Lucid went public in 2021 via
SPAC, the filing said. Its market capitalisation, which was $23 billion at the
time of its listing, was worth $13 billion as of Thursday's close.
VinFast faces competition from
established rivals led by Tesla (TSLA.O) that
have been bringing a range of new EVs to market amid a weakening global
economy.
VinFast founder Pham Nhat Vuong,
Vietnam's richest man, last month told Vingroup (VIC.HM) shareholders
VinFast could break
even as soon as the end of 2024.
He said it expects to
sell as many as 50,000 units this year, an almost seven-fold increase over 2022
as it ramps up exports to North America and starts shipping to Europe.
VinFast began
operations in 2019 and has a plant in Vietnam and plans for a second one in North
Carolina.
It has shipped about
3,000 EVs to North America and expects to deliver the longer-range of its VF 8
SUV to customers this month.
Reporting by Phuong
Nguyen; Editing by Martin Petty
SEPTEMBER 11, 2020 2:39 PMUPDATED 3 YEARS AGO
Exclusive:
Vingroup weighs selling school, health units as Vietnam's biggest firm
refocuses
HANOI (Reuters) - Vietnam’s Vingroup is considering selling controlling stakes in its medical and education units, two sources with direct knowledge said, as the conglomerate exits non-core businesses and fortifies its balance sheet amid a profit slump.
Vingroup, Vietnam’s largest listed firm,
could look for buyers for Vinschool, a private school business, and Vinmec, a
chain of private hospitals, the sources told Reuters.
The conglomerate has not appointed any
advisers for the stake sales so far, but in its informal talks two buyers have
shown interest in the two businesses, the sources said.
A third source aware of the matter said
Vingroup has received preliminary interest, and the controlling stakes could
fetch roughly $1.5 billion. The source said the interest was rejected.
It is also planning to raise as much as
$1.1 billion in debt before the year-end for refinancing existing debt, one of
the sources said.
The company did not respond to a request
for comment. The sources declined to be named because they were not authorised
to speak to the media.
Vinschool runs 27 educational facilities
and Vinmec operates seven hospitals in Vietnam.
The plans are part of moves by Vingroup,
which has a market value of $13 billion and posted half-year revenue of $1.7
billion, to stem losses in some of its units that have been compounded by the
COVID-19 pandemic.
Founded by Vietnam’s richest man,
billionaire Pham Nhat Vuong, Vingroup is omnipresent in the Southeast Asian
country.
Just a year ago, one could be born in a
Vinmec hospital, go to Vinschool, live in a Vinhomes apartment and drive to
Vinmart in a Vinfast car.
But the group sold Vinmart last year,
and with the potential stake sales of Vinschool and Vinmec, Vingroup is quickly
scaling back its ambitions.
The expansion over the years, though,
has pushed up Vingroup’s debt, and the losses at some of the ventures have
squeezed its cash flow.
S&P Global and Fitch cut their
ratings outlook on Vingroup to negative from stable last year, citing concerns
about its over-reliance on cash-rich property unit Vinhomes to fund its new ventures.
Slideshow ( 2 images )
Vingroup’s first-half net profit tumbled
60% to 1.35 trillion dong ($58.26 million). Its shares on the Ho Chi Minh Stock
Exchange have underperformed this year, falling 21% compared to the benchmark
index’s 7.6% drop.
Its interest coverage ratio, which
indicates the company’s ability to pay off debt, dropped to 3.8 times in the
first half of this year from 5.0 in 2019, according to a copy of an earnings
presentation prepared by Vingroup for potential investors that was seen by
Reuters.
AUTOMOBILE GAMBLE
Vingroup scrapped plans to launch
Vietnam’s sixth airline, “Vinpearl Air” in January.
Late last year, the group also abandoned
moves to form a new unit from its sports, entertainment and hospitality
business due to “profitability concerns” of some of the assets, a source with
direct knowledge of the plans told Reuters.
It has made real estate, technology and
automobiles its key growth focus, but it remains to be seen how the plan shapes
up, especially its big bet on cars.
In 2017, Vingroup earmarked $3.5 billion
to create its Vinfast car unit with plans to produce around 250,000 cars
annually within the next five years, a period when it does not expect the
venture to be profitable.
Last year, Vinfast sold 19,400 cars and
50,000 e-scooters, according to company data. Its net loss ballooned to 6.6
trillion dong in the first half of 2020 from 1.6 trillion dong in the year-ago
period.
Vinfast’s latest offering, a
gold-trimmed limited edition luxury SUV only available in Vietnam and billed as
“the most powerful commercial vehicle in the world” is, at over $160,000,
priced out of reach of most Vietnamese car owners. And its entry-level “Fadil”
model is around 13% more expensive than competing models from Kia and Hyundai.
Vinfast equipment, real estate and
inventory have all been put up as security for loans with international banks,
as have 20 million shares that the company received from Vinhomes, according to
its 2019 draft earnings report seen by Reuters.
($1 = 23,172.5000 dong)
Reporting by Phuong Nguyen and James Pearson; Additional
reporting by Anshuman Daga in Singapore and Khanh Vu in Hanoi; Editing by
Muralikumar Anantharaman
https://www.reuters.com/article/vietnam-vingroup-idINKBN2620VN
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