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 Q2 2025 financial statements compared to the same period in 2024 as follows:

Unit: VND

Source: Financial Statements for Q2 2025

 In the second quarter of 2025, the Company recorded a profit after tax of VND 287 million, equivalent to 5.05% of the figure in the same period last year. This sharp decline primarily reflects the negative impact of industry-wide and market challenges during the first half of the year.

 The pharmaceutical sector in the first six months of 2025 faced multiple headwinds, including weakened demand, exchange rate volatility, rising input costs, and intensifying internal competition. In particular, consumption in traditional markets slowed significantly, directly affecting the Company’s business performance.

 To maintain market share and support the distribution network during this challenging period, the Company proactively implemented a range of sales policies tailored to different customer segments. However, net revenue reached only about 80% of the same period last year. The decline in revenue led to a corresponding drop in sales volume in the first half of 2025, resulting in higher production costs per unit. Additionally, the exchange rate in 2025 increased significantly compared to 2024. These factors caused the cost of goods sold to decrease at a slower pace than revenue. As a result, the contraction in gross margin, combined with lower sales, had a considerable impact on profit after tax.

 Alongside business response measures, the Company also focused on gradually reducing outstanding loans and accelerating receivables collection to strengthen cash flow, enhance financial flexibility, and mitigate risks amid an uncertain market recovery. Although these efforts have not yet translated into immediate profit improvements, they form a critical foundation for sustainable growth in the coming periods.

 Despite the underperformance in profit after tax during the period, the Company remains committed to a strategy of proactive adaptation, seeking to balance revenue growth objectives with financial stability. In the upcoming quarters, the Company will continue to:

- Review the effectiveness of promotional programs and sales policies;

- Restructure the product portfolio, prioritizing product lines with high profit margins and strong growth potential;

  - Maintain stable cash flow while enhancing operational flexibility to promptly adapt to market developments.