Econ
Vietnam's top coffee maker posts US$34.4 million profit per year despite leadership crisis
The company remains one of the leaders in Vietnam`s food and beverage industry, despite its reputation being drowned in the conflict between the chairman and his wife for more than three years.
Vietnam's top coffee brand Trung Nguyen reported pre-tax profits of VND768 billion (US$33 million) in 2016 and VND681 billion (US$29.3 million) in 2017, respectively, despite the ongoing divorce dispute between the group's chairman and his wife, according to CafeF.vn.
A lower profit in 2017 was due to high sale and administrative expenses, coupled with depreciation of tens of billion VND for the group's recent acquisition of fleet of supercars, according to CafeF.
Nevertheless, the profit of around US$30 million per year helps Trung Nguyen remain one of the top companies in Vietnam's food and beverage industry.
Trung Nguyen's net revenue over the last four years hovered around VND3.8 - 4 trillion (US$163.44 - 172 million).The flat growth was partly due to difficulties in Vietnam's coffee industry. Vinacafe Bien Hoa, Trung Nguyen's main competitor even saw a slump in its coffee revenue, down from VND2.3 trillion (US$98.87 million) in 2014 to VND1.7 trillion (US$73.06 million) in 2017.
However, as Trung Nguyen is struggling to prevent a declining trend in its profit, Vinacafe Bien Hoa found its new engine for growth in energy drink to keep the latter's revenues in range of VND3 - 3.3 trillion (US$128.91 - 141.8 million), in turn narrowing profitability gap between the two.
Overshadowed by dispute
In 2014, Trung Nguyen recorded a pre-tax profit of VND1.3 trillion (US$55.86 million), four times higher than the figure posted in 2013. The company's profit has been on a declining trend since 2015, when the conflict between Trung Nguyen's Chairman Dang Le Nguyen Vu and his wife Le Hoang Diep Thao was made public.
A year later, Vu ousted Thao from her post as deputy director and started a lengthy divorce process. The follow up was a legal battle over Trung Nguyen's ownership, as each side is accusing each other of obstructing the company's operations.
In the latest controversial move, Thao argued that Trung Nguyen had misused nearly VND1 trillion (US$42.98 million) in marketing, buying luxury cars, and other expenses from January 1, 2015 to January 24, 2017.
On August 13, Vu for the first time met reporters after five years staying away from the limelight. With regard to the super cars, he said it was part of the US$5-billion educational program, which will provide books for people across the country.
He added the super cars was a PR stunt, making the program become well-known among the public. Eventually, those cars still belong to Trung Nguyen Group, which should not be considered as a waste.
Illustrative photo.
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Nevertheless, the profit of around US$30 million per year helps Trung Nguyen remain one of the top companies in Vietnam's food and beverage industry.
Trung Nguyen's net revenue over the last four years hovered around VND3.8 - 4 trillion (US$163.44 - 172 million).The flat growth was partly due to difficulties in Vietnam's coffee industry. Vinacafe Bien Hoa, Trung Nguyen's main competitor even saw a slump in its coffee revenue, down from VND2.3 trillion (US$98.87 million) in 2014 to VND1.7 trillion (US$73.06 million) in 2017.
However, as Trung Nguyen is struggling to prevent a declining trend in its profit, Vinacafe Bien Hoa found its new engine for growth in energy drink to keep the latter's revenues in range of VND3 - 3.3 trillion (US$128.91 - 141.8 million), in turn narrowing profitability gap between the two.
Overshadowed by dispute
In 2014, Trung Nguyen recorded a pre-tax profit of VND1.3 trillion (US$55.86 million), four times higher than the figure posted in 2013. The company's profit has been on a declining trend since 2015, when the conflict between Trung Nguyen's Chairman Dang Le Nguyen Vu and his wife Le Hoang Diep Thao was made public.
A year later, Vu ousted Thao from her post as deputy director and started a lengthy divorce process. The follow up was a legal battle over Trung Nguyen's ownership, as each side is accusing each other of obstructing the company's operations.
In the latest controversial move, Thao argued that Trung Nguyen had misused nearly VND1 trillion (US$42.98 million) in marketing, buying luxury cars, and other expenses from January 1, 2015 to January 24, 2017.
On August 13, Vu for the first time met reporters after five years staying away from the limelight. With regard to the super cars, he said it was part of the US$5-billion educational program, which will provide books for people across the country.
He added the super cars was a PR stunt, making the program become well-known among the public. Eventually, those cars still belong to Trung Nguyen Group, which should not be considered as a waste.
