Tipharco Pharmaceutical Joint Stock Company (DTG) hereby provides an explanation to the State Securities Commission, the Hanoi Stock Exchange, and esteemed shareholders regarding the fluctuations in revenue and profit after tax in the Q4 2025 financial statements compared to the same period in 2024 as follows:
- Profit after Corporate Income Tax in Q4/2025 increased by 11.08% compared to Q4/2024 (equivalent to an increase of over VND 1.1 billion). Despite a 16.41% decline in net revenue during the period, the Company still recorded profit growth due to the following key factors:
- Optimization of Cost of Goods Sold and Gross Profit Margin: While net revenue decreased by 16.41%, the Cost of Goods Sold experienced a more significant reduction of 19.96% (from VND 117.9 billion to VND 94.4 billion). This demonstrates the Company's effective production cost management, a strategic shift in product mix toward high-margin pharmaceutical products, and efficient control of input material costs.
- Significant Reduction in Financial Expenses (particularly Interest Expenses): Financial expenses in Q4/2025 decreased sharply by 63.50% year-on-year. This was primarily driven by the Company’s proactive settlement of the majority of its short-term loans. Specifically, the balance of short-term loans and financial lease liabilities as of December 31, 2025, dropped from VND 111.3 billion to VND 38.0 billion (a decrease of over VND 73 billion compared to the beginning of the year). The reduction in financial leverage has eased interest expense pressure, contributing directly to profit growth during the period.
Efficient Working Capital Management: The Company intensified debt collection from customers, reducing short-term accounts receivable from VND 108.5 billion to VND 60.1 billion. The recovered cash flow was utilized for debt repayment and reinvestment, resulting in a healthier and more resilient financial structure.
The profit growth in Q4/2025 is the result of a decisive financial restructuring strategy and effective operational cost management. The Company remains committed to maintaining transparency and continuously optimizing business operations to ensure the best interests of our valued Shareholders and Investors.
Respectfully,
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