Recovery not from core operationsAccording to FiinGroup’s statistics, after-tax profits in the fourth quarter of 2020 of the non-financial businesses on the stock market have recovered to the previous level of COVID-19, up 2.4% over the same period last year. However, this growth rate is still lower than the average of the fourth quarter in the 2016-2020 period.
On the other hand, profit quality indicators include pre-tax profit and interest (EBIT); Profit before tax, depreciation and interest (EBITDA) decreased by 8.8% and 9.1% year-on-year, respectively, of which EBIT fell for the fifth consecutive quarter.
This shows that this recovery did not come from the core businesses of the business, but on irregular income (mainly financial income).
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According to financial expert Nguyen Le Ngoc Hoan, the basic recovery profit from non-regular income will have 2 sides. On a positive perspective, profits made from financial income while core operations remained shrinking before COVID-19 can help businesses overcome difficulties and catch up better when the economy is really normal again.
But from a negative perspective, it shows that COVID-19 has still caused difficulties and that the business is not easily profitable in the core business, while this is the foundation that contributes to the strength of the economy.
FiinGroup’s statistics show that, except for the export group, the most prominent are the recovered resources and chemicals; Group benefiting from basic consumption such as electricity and water; some groups of industries saw a decline in profits due to COVID-19 such as: Real estate (-17.9%), retail (-6.5%), tourism – entertainment (-241.6%; Oil and gas (-107.6%) … Therefore, it is necessary to screen the industries to have certain support mechanisms such as continuing to reduce interest rates on old loans, new loans at least until the end of this year.
“Equally important to support and activate capital is that the regulators need to have a close supervision so that businesses use capital for the right purpose of borrowing, not to let capital flow into non-production financial investments”, PhD. Noted Nguyen Tri Hieu, finance and banking expert.
Source: enternews.vn – Translated by fintel.vn