DLG loses around 40% of its profit after the audit

According to the newly released reviewed semi-annual financial statements for 2025, DLG reported net revenue of more than VND 315 billion, unchanged from the self-prepared report, but down 47% compared to the same period last year.

The company’s financial income dropped 36% compared to the pre-review figure, to VND 54.3 billion—50% lower year-on-year. This was the main reason why DLG’s post-review net profit fell 39% from the self-prepared report, to just over VND 45 billion.

The company explained that financial income declined after the review due to adjustments in loan interest income. Administrative expenses decreased thanks to debt recovery leading to higher reversal of bad debt provisions. Meanwhile, deferred corporate income tax expenses increased by VND 4.4 billion due to the exclusion of financial investment provisions for subsidiaries, which were set aside after the review.

Beyond losing nearly 40% of its profit, the reviewed financial statements also carried several emphasis-of-matter notes from auditors—particularly concerns about the company’s ability to continue operating.

As of June 30, 2025, DLG’s consolidated accumulated losses totaled more than VND 2,411 billion, while its short-term liabilities exceeded short-term assets by more than VND 529.5 billion.

“These conditions indicate the existence of significant uncertainties that may cast substantial doubt on the company’s ability to continue as a going concern,” the auditor stressed.

However, auditors also noted that in the first six months of 2025, the company’s operating cash flow remained positive. DLG continued restructuring efforts to reduce accumulated losses and repaid principal and interest to banks totaling more than VND 207.4 billion.

Management is currently negotiating debt rescheduling plans for 2025–2026, as well as other due payables. Most overdue debts with credit institutions are secured by collateral.

The management board also set plans to improve business performance through investments, joint ventures in profitable companies and projects, as well as disposal of collateral and guarantees to ensure continued operations.

Responding to the auditor’s comments, management confirmed that as of June 30, 2025, accumulated losses stood at more than VND 2,411 billion for the Group and over VND 2,599 billion for the parent company. Meanwhile, the Group’s short-term liabilities exceeded short-term assets by over VND 529.5 billion, and the parent company’s by more than VND 475 billion. These conditions highlight the existence of significant uncertainties regarding going concern.

Nevertheless, in line with its Board of Directors’ strategic orientation and 2025–2026 targets approved at the 2025 AGM, the company achieved certain results in H1/2025: 48.4% of revenue targets and 22.6% of profit targets. This indicates gradual financial restructuring and reduction of accumulated losses.

Additionally, operating cash flow remained positive, and the company repaid over VND 207.4 billion in bank loans and interest, reducing financial costs and improving profitability—alongside a series of core measures to enhance operations going forward.

Management emphasized that business operations are gradually stabilizing and improving, and affirmed that preparing and presenting the separate and consolidated semi-annual 2025 financial statements on a going-concern basis is appropriate.

The auditor also noted that the reviewed semi-annual 2024 financial statements, performed by another independent audit firm, issued a qualified opinion due to unassessed recoverability of loans and short-term receivables as of June 30, 2024.

Regarding this issue, DLG management stated that the company had recovered and added collateral, as well as made full provisions for these loans and receivables during 2024 and the first half of 2025.