Auditor flags going concern risk for Vietnam’s 68-year-old Thuong Dinh Footwear

In its audited financial statements for 2024, the company reported a net loss of nearly VND13 billion (US$499,500), more than twice the loss recorded the previous year. 

Revenue slightly declined to VND79 billion ($3 million), while selling and administrative expenses increased.

Auditors noted that the company’s short-term liabilities have exceeded its assets by VND14.1 billion ($541,700), highlighting that its survival depends heavily on recovering outstanding debts, securing loan extensions, and improving operational performance.

“These conditions indicate the existence of a material uncertainty that may cast significant doubt on the company’s ability to continue as a going concern,” the auditors warned.

Thuong Dinh’s accumulated losses totaled VND67 billion ($2.6 million) at the end of 2024. 

The company holds total assets valued at VND120 billion ($4.6 million), including VND38 billion ($1.5 million) in inventory and VND30 billion ($1.2 million) in receivables—almost half of which have been overdue for more than three years.

Total liabilities reached VND94 billion ($3.6 million), primarily comprising short-term debts. 

The largest creditor is Vietcombank’s Thanh Cong branch, holding over VND22 billion ($845,300) in loans secured against the company’s assets and receivables.

CEO Nguyen Van Khiem stated that the company is actively working to recover outstanding receivables, including VND11.3 billion ($434,200) owed by a domestic footwear distributor.

Once a popular local brand, Thuong Dinh has faced mounting challenges from declining exports, increased domestic competition, and rising production costs. 

The company plans to produce up to 900,000 pairs of shoes in 2025, aiming for revenue of VND100 billion ($3.8 million) and a modest profit of VND100 million ($3,850).

Additionally, Thuong Dinh intends to complete a state divestment process within this year.