21:09 (GMT +7) - Thursday 17/08/2017

Business

Digiworld records high profit in Q2

Released at: 14:53, 25/07/2017

Digiworld records high profit in Q2

Photo: DGW

Electronics distributor sees significant rise in after-tax profit in Q2 of 77%.

by Khanh Chi

Electronics distributor the Digiworld Corporation (DGW) has released its financial report for the second quarter and first half of 2017, with second quarter after-tax profit reaching nearly $900,000, up an impressive 77 per cent year-on-year.

Sales in the second quarter, however, reached just $34.8 million, down 16 per cent quarter-on-quarter. Cost price also fell 17.5 per cent, which led to a rise of 14 per cent in gross profit, to $2.57 million.

In the first half it recorded revenue of $68.3 million and after-tax profit of $1.28 million, down 11 and 10 per cent year-on-year, respectively, for an earnings per share (EPS) of $0.03, and representing 52.7 per cent of the annual revenue plan.

According to DGW, significant growth rate in the second quarter’s after-tax profit was mostly driven by the company’s streamlined restructuring strategy to accelerate efficiency.

It changed its product structure in the phone sector, focusing on mobile earth station (MES) product lines to boost profit margins to 7.4 per cent. This includes profits from Xiaomi products, which began to gain recognition in the second quarter.

Moreover, the office equipment sector continued to grow strongly and increased its contribution to gross profit. In addition to steady growth in current product lines, new products lines such as those from LG also contributed to the company’s profit in the second quarter.

Enterprise management costs fell, meanwhile, due to efficiencies from human resources restructuring with more specialized and streamlined strategies, preparing for long-term business expansion plans. Good debt management also optimized the use of cash flow, saving on interest costs.

One of the country’s leading electronics distributors, DGW previously announced its new business strategy of jumping into the lucrative healthcare product retail market by aiming to begin functional food distribution in mid-2017.

Mr. Doan Hong Viet, Chairman of DGW, told VET that according to the plan the company will spend around $2 million on extending its portfolio by investing in human resources and sales outlets along with warehousing improvements. It has targeted the new business category to earn profit by 2018 and contribute to the company’s revenue of about nearly $4 million in 2017.

Earlier this year, DGW entered into a partnership with Xiaomi mobile phones to distribute its products in Vietnam. Describing the agreement as a long-term strategic partnership, the Chinese company said that DGW would distribute, market, and provide after-sales support for its offerings in Vietnam, including smartphones and its Mi Ecosystem products.

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