The Japan-Vietnam Medical Instrument JSC (JVC) targets VND630 billion (US$28 million) in net revenue for 2017, an increase of 26 per cent from last year’s number, the management board said at the company’s annual shareholder meeting on Thursday. JVC also aims to earn VND19 billion in post-tax profit, which would be a huge improvement compared to a loss of VND31.7 billion made in 2016.
Last year, the company managed to reduce its losses to VND31.7 billion from VND1.36 trillion in 2015 and cut its bad debt provision to VND23 billion from VND1.3 trillion in 2015.
However, the management board said that JVC will not make dividend payout for 2017 if the company still records accumulated loss by the end of the year.
In 2016, JVC managed to reclaim the market shares in 14 southern provinces and became the authorised dealer of the Japan-based technology conglomerate Hitachi.
It also plans to participate in new hospital projects, make stronger investment in private healthcare sector and reduce its inventory to help improve its performance.
To achieve such results, the management board said that JVC could be divided into two units, with one keeping all “bad” assets and the other one keeping “good” assets.
The “good” unit will have to make dividend payouts for shareholders if it makes profit while the other one will operate to collect receivables and will be sold in the future.
However, the plan has not been completed as the management board is having difficulty discussing with major shareholders of the company.
At the shareholder meeting, the management board said that the division of the firm is a part of the plan to improve business efficiency and deal with its payables problem.
One of the main problems is the company has trouble classifying its payables and receivables from each other, while some of its customers are unwilling to work with the company on this issue.
The issue has caused JVC a lot of trouble in collecting legal documents, financial reports and invoices, which have gone missing, to process and deal with debts while the company has spent a part of its revenue in the past few years as bad debt provision, which is a factor that has weighed down its profit in recent years.
The company has asked the police and other government agencies to help collect its receivables but gained few results from this effort.
In addition, JVC also has troubles with its stockpiles and assets used under associate and cooperative agreements with its partners, which have taken too much time to manage and keep track of.