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VJC - Big Q4 loss drags 2022 bottom line into negative territory - Earnings Flash

Company Research

02 Feb 2023

- VJC announced 2022 revenue of VND39.3tn (USD1.7bn; +3.1x YoY) and a net loss of VND2.2tn (USD93.3mn) vs net profit of VND74.6bn (USD3.2mn) in 2021. VJC's 2022 revenue is equal to 96.1% of our 2022F forecasts, but the airline’s loss in 2022 goes against our expectation that VJC would have a positive bottom line in the year. As such, we see potential downside risk to our 2023 projections, pending a fuller review.

- In Q4 2022, VJC’s revenue advanced 4.2x YoY to VND11.8tn (USD507mn) with NPAT-MI of -VND2.4tn (-USD101mn) vs NPAT-MI of -VND102bn (-USD4.4mn) and VND40.6bn (USD1.7mn) in Q4 2021 and Q3 2022, respectively.

- In Q4 2022, the EBIT loss at the standalone company level (which mainly represents the airline's transportation segment) was VND4tn (USD167mn) vs Q3 2022's loss of VND857bn (USD35mn). In our view, VJC’s large EBIT loss in Q4 2022 can be attributed to (1) lower airfares as domestic air travel demand cooled down along with high fuel costs and (2) operating leverage. VJC’s financial income jumped 16.8x YoY and 9.9x QoQ to VND2.1tn (USD88.6mn) in Q4 2022 but still could not fully offset the EBIT loss.

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