Uber, Grab ran­kle Vi­na­sun share­hold­ers

The Myanmar Times - - International Business -

IN the last three years, ride-hail­ing ap­pli­ca­tions Uber and Grab have dec­i­mated the busi­ness of lo­cal taxi firms. Now, taxi com­pa­nies’ for­eign share­hold­ers are feel­ing the pain.

One of the most af­fected com­pa­nies is Vi­na­sun, which mainly op­er­ates in the south and has VNÐ678.6 bil­lion (US$30.16 mil­lion) in char­ter cap­i­tal. Ac­cord­ing to the eco­nomic and fi­nan­cial news site cafef.vn, Vi­na­sun has re­ported slower growth rates in both net rev­enue and profit since the two apps en­tered ViӋt Nam in mid-2014.

From 2010-15, Vi­na­sun’s net rev­enue in­creased from over VNÐ1.64 tril­lion to VNÐ4.25 tril­lion. The HCM City-based taxi com­pany also recorded that its post-tax profit grew from VNÐ179.4 bil­lion to VNÐ329.3 bil­lion. In 2016, how­ever, the com­pany’s net rev­enue grew at a slower pace to reach VNÐ4.5 tril­lion, while its post-tax profit fell to roughly VNÐ312 bil­lion.

In the first half of 2017, Vi­na­sun per­formed even worse as its net rev­enue dropped 16 per cent year on year to VNÐ1.9 tril­lion and its post-tax profit de­clined by a third to VNÐ100 bil­lion.

In the past nine months the com­pany also had to cut its pay­roll by nearly 8,000 em­ploy­ees, down to about 9,200 from 17,170 in 2016. The 2016 fig­ure rep­re­sented an in­crease by a fifth from around 14,200 em­ploy­ees in 2013.

Much of the down­ward trend in Vi­na­sun’s busi­ness is at­trib­uted to strong com­pe­ti­tion since Uber and Grab en­tered ViӋt Nam in 2014, cafef. vn re­ported.

A large num­ber of driv­ers that were re­moved from Vi­na­sun’s pay­roll have turned to work for Uber and Grab.

Lower per­for­mance in re­cent years has sent shares of Vi­na­sun on the HCM Stock Ex­change down by 51 per cent from the record high of VNÐ37,580 ($1.67) per share in early De­cem­ber 2014. Vi­na­sun’s shares, listed un­der code VNS, closed Tues­day at VNÐ18,450 per share.

Over time, the fall of Vi­na­sun’s shares has caused big losses for share­hold­ers, es­pe­cially the two Sin­ga­porean in­vest­ment funds TAEL Part­ners and Govern­ment of Sin­ga­pore (GIC), as those two funds started in­vest­ing in Vi­na­sun in 2013-14 when the com­pany was at its strong­est.

In late 2013, TAEL Part­ners bought three mil­lion shares of Vi­na­sun, equal to a 6.9 per cent stake, via a pri­vate place­ment at VNÐ45,000 per share.

In 2014, TAEL Part­ners in­creased its own­er­ship in Vi­na­sun to 18.3 per cent, equal to more than 12.4 mil­lion shares, be­com­ing the big­gest share­holder of the com­pany.

Cafef.vn re­ported that the total value of pur­chases made by TAEL Part­ners was VNÐ383 bil­lion. As shares of Vi­na­sun have dropped 51 per cent in value, TAEL Part­ners’ in­vest­ment in the taxi firm has lost 40 per cent, and is now worth VNÐ221 bil­lion.

GIC bought 4.5 mil­lion shares of Vi­na­sun in Au­gust 2014, equal to a 7.96 per cent stake, for VNÐ203 bil­lion, and its own­er­ship in the taxi firm has re­mained steady since then.

At the mo­ment, the value of VNS shares held by GIC is around VNÐ96 bil­lion, down 53 per cent from the ini­tial fig­ure. – Viet­nam News

Photo: Viet­nam News

In the first half of 2017, Vi­na­sun per­formed even worse as its net rev­enue dropped 16 per cent year on year to VNÐ1.9 tril­lion and its post-tax profit de­clined by a third to VNÐ100 bil­lion.

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