Phu Thinh-Nha Be Garment Joint Stock Company’s management board has agreed to halt its apparel manufacturing business from early next year, as well as to de-list all its 2.2 million shares on the Ha Noi Stock Exchange.This decision is sought to overhaul its operations which have been declining since 2012.
Net profits of the HCM City-based garment company dropped from VND7.5 billion (US$333,000) in 2012 to an estimated loss of over VND2 billion in 2016. This year is the first time this company has reported a loss.
Its sales decreased 21.5 per cent year-on-year to VND33 billion this year.
At its annual shareholders’ meeting earlier this year, the company approved the targets of nearly VND49 billion in net revenues and VND3.3 billion in net profits, as well as a 10-per-cent dividend.
In its extraordinary shareholders’ meeting on Saturday, the garment company decided to stop manufacturing apparel from January 12 next year, citing unstable material sources, rising costs and a shortage of labour which have resulted in ineffective operations.
The garment company will also seek investors to offload its entire holding of 19 per cent of capital, equivalent to VND5.7 billion, in Nha Be Real Estate Development JSC, as well as sell stakes worth a combined VND2 billion in Viet Thang Garment JSC and NBC Communications and Tourism JSC.
To focus on restructuring, the company will also leave the stock exchange but provided no specific timetable.
Phu Thinh-Nha Be Garment turned into a joint stock company in January 2004 and debuted shares on the Ha Noi Stock Exchange in December 2006 under the stock code of NPS.
Its share prices climbed 151 per cent since its debut to around VND12,000 per share. However, prices hit the floor prices in the last two sessions, to VND10,200 each after the information on delisting was announced.