Despite Losses, TTF Expands Investment into the Middle East

Casadora Furniture Joint Stock Company, a subsidiary in which TTF owns 60%, has just secured an investment certificate to enter Dubai. This is a new strategic path for the wood industry firm in the Middle Eastern market, where there are several high-end real estate developments.

On June 5, 2024, the Ministry of Planning and Investment (MPI) awarded the first overseas investment registration certificate to Casadora Furniture JSC, naming the foreign firm Belmonte Design Services L.L.C. The investment is USD 500,000, which is equivalent to more than VND 12 billion in equity capital.

The investment form entails acquiring shares in a foreign economic company in order to participate in its administration, with the goal of providing interior design services under big global brands and expanding the presence of these brands in Vietnam and the Middle East.

Regarding business results, TTF’s consolidated financial report for Q3/2024 shows a net revenue of over VND 236 billion, a 39% decrease year-over-year. The post-tax loss reached over VND 24.4 billion, compared to a loss of over VND 9 billion in the same period last year.

For the first nine months of 2024, TTF recorded over VND 935 billion in net revenue, down more than 15% year-over-year. The post-tax loss was over VND 29.3 billion, compared to a nearly VND 49 billion loss in the previous year.

The business attributed the drop in export income to lower order volume in Q3/2024, owing to severe hurdles in main markets. Demand for interior wood items in the United States and Europe fell as buyers became concerned about the economic downturn and rising interest rates. Furthermore, high logistics costs and difficulties in global shipping caused by conflicts in certain regions caused clients to postpone purchases until Q4/2024.

Domestically, revenue from projects decreased due to delays in implementation by real estate investors. The impact of recent credit and interest rate policies has negatively affected the real estate market. Furthermore, natural disasters in the northern provinces also affected the progress of implementation and construction at certain projects.

The rise in material prices and a drop in production volume in Q3/2024 negatively impacted the company’s profit margins.

To improve business efficiency, TTF management has implemented strategies such as expanding and seeking new customers in the European, U.S., and especially Asian, Dubai, Australian, and East Asian markets to rapidly increase production volume in Q4/2024. New customers have placed orders, expected to bring revenue in Q4/2024.

The company is also participating in trade exhibitions in markets like Dubai, Europe, and the U.S. to introduce new products, which have attracted interest from new customers.

TTF is collaborating with brand partners like JNL and ShaoHai Hui to expand distribution channels in markets such as Asia and Dubai, while focusing on restructuring ineffective subsidiaries to allocate resources towards new business projects.

TTF's cumulative losses as of September 30, 2024 were about VND 3,268 billion, while its charter capital was over VND 4,112 billion. As a result, TTF's shares were placed on warning by the HoSE on April 21, 2022.

To address the stock warning status, TTF recently announced remedies and a recovery strategy, which included preserving ties with traditional customers, generating future customers, consistently improving, and retaining client credibility and confidence. TTF is also stepping up its product design efforts, creating sample items made in-house, and actively seeking high-value orders.

The organization is boosting management and control over technical areas, product quality, and delivery schedules, with the goal of increasing client credibility and partnership prospects. Customer care will be prioritized in order to maintain existing clients and create new relationships. For project activities, TTF will continue to build its brand and gain the trust of major property developers in Vietnam and throughout the world, including Vingroup, Gamuda Group, and Capitaland.

TTF will continue to build ties with important clients across many industries, including Natuzzi, Williams Sonoma, TJX, Four Hands, and Article, in order to steadily improve revenue, order value, and diversify export markets.

Market diversification, both domestically (focusing on Domini and Casadora brands) and internationally (expanding in Europe and the U.S.), is planned to mitigate risks and maximize profits.

TTF will closely monitor market trends and proactively plan for potential business risks. Preventive measures will be implemented if the U.S. applies trade defense policies in the future. TTF is also researching and planning to expand factories in DakLak, Binh Dinh, and exploring new sector niches for growth.

The company will strengthen collaboration with potential partners with complementary advantages to TTF to create a closed value chain from design to production and construction, providing a “comprehensive interior solution” that enhances product quality, optimizes costs, and improves project timelines, thereby delivering maximum economic benefits to customers.