VinFast Reports Unaudited Fourth Quarter and Full Year 2023 Financial Results
- VinFast reported a 26% increase in revenue to $437 million in Q4 2023 compared to the previous quarter.
- The company achieved a 91% year-over-year revenue growth in FY 2023, reaching $1,198 million.
- Gross profit margin improved significantly, with a negative (40.1%) in Q4 2023 compared to negative (82.6%) in Q4 2022.
- VinFast aims to deliver 100,000 vehicles in FY 2024 and expand its global sales network to approximately 400 points of sales by the end of 2024.
- The company plans to reduce material costs by 40% within two years of each model launch through engineering and sourcing initiatives.
- VinFast's entry into the Indonesian and Indian markets with electric vehicle models is expected to drive substantial sales growth.
- The company's battery leasing policy aims to make electric vehicles more affordable and competitive in new markets.
- VinFast's conference call for Q4 2023 and FY 2023 earnings is scheduled for February 22, 2024, at 8:00 AM U.S. Eastern Time.
- None.
Insights
The reported increase in VinFast's revenue and sales volumes, particularly the 374% year-over-year growth in electric vehicle deliveries, signals a robust demand for the company's products. This growth trajectory is critical for investors as it showcases the company's ability to scale operations and capture market share in the burgeoning electric vehicle (EV) sector. The transition to a capital-light hybrid distribution model is a strategic pivot that could reduce overhead costs and improve profitability, which is often a key concern for investors in capital-intensive industries like automotive manufacturing.
Furthermore, the company's expansion into high-growth markets such as Indonesia and India represents a strategic move to leverage emerging market dynamics and consumer preferences for EVs. This could potentially open up new revenue streams and diversify market risk. The target of 400 sales points globally by the end of 2024 suggests an aggressive push for market penetration, which if successful, could further cement VinFast's position as a significant player in the global EV market.
The announcement of a 91% increase in full-year revenue is a strong indicator of VinFast's financial health and its trajectory of growth. However, the reported gross margin improvements, while positive, must be contextualized within the broader industry standards where positive gross margins are typically expected. The gross loss figures and negative margins, even though they are an improvement from the previous year, indicate that the company is still in a phase of investment and growth where profitability is not yet realized. Investors will be keen on monitoring the effectiveness of the cost reduction programs and the impact of capital expenditures on long-term profitability.
It's also worth noting the significant capital investments in capital expenditures, particularly the development of new models and expansion of manufacturing capabilities. These investments are essential for future growth but will also impact cash flows and financial stability in the short term. The ability to balance these investments with cost optimization strategies will be critical for VinFast's financial success.
The shift towards a hybrid distribution model and the establishment of a dealership network could be a response to the challenges faced by a direct-to-consumer approach, such as high capital requirements and the need for extensive infrastructure. This move may also be influenced by the need to comply with franchise laws in the U.S. that govern automotive sales. By expanding the dealership network, VinFast could benefit from dealers' local market knowledge and existing customer relationships, potentially accelerating market entry and adoption rates.
The introduction of four new SUV models and the emphasis on cost optimization through material cost reduction and production efficiencies indicates a focus on product diversification and operational excellence. Such strategies are critical in the highly competitive automotive industry, where innovation, cost management and speed to market are key differentiators. The commitment to a 400-point sales network and the establishment of a manufacturing plant in India demonstrate a long-term vision for a global footprint, aligning with industry trends towards localization and regional hubs.
- Fourth quarter revenue of
$437 million 26% over the previous quarter and133% year-over-year. Profit margins increased significantly driven by cost optimization. - Full year revenue of
$1,198 million 91% year-over-year. - Targeting approximately 400 points of sales globally by the end of 2024.
- Strengthening ability to compete effectively in other markets to build scale, especially the untapped, volume-driven markets closer to home like
Indonesia andIndia . - Company sets target of delivering 100,000 vehicles in FY 2024.
- Cost reduction programs expected to further improve margins.
FY 2023 | 4Q 2023 | 3Q 2023 | |
EV Deliveries1 | 34,885 | 13,513 | 10,027 |
E-scooters Deliveries | 72,468 | 24,309 | 28,220 |
Madam Thuy Le, Chairwoman of the Board of Directors, said: "2023 was a whirlwind of firsts for VinFast, culminating in a strong public debut. We launched exciting new products, expanded our distribution network, and solidified our presence in existing markets while opening doors to promising new ones. These moves laid a strong foundation for 2024, a year of global expansion and cost optimization. We're already seeing positive signs in key markets like the
Ms Anh Nguyen, Chief Financial Officer, stated: "We saw favorable results in our business operations in the fourth quarter, with strong revenue growth and improved profit margins. We remain focused on enhancing investment performance and strengthening our balance sheet by reducing production and materials costs and strategically optimizing our global manufacturing CapEx. These initiatives will support our expansion efforts into high-growth markets like
Strong Revenue Growth and Gross Profit Improvement from Prior Year
VinFast delivered a total of 34,855 electric vehicles in FY 2023, marking a
Despite a slight decrease in the fourth quarter of 2023 compared to the third quarter, e-scooter deliveries also saw significant growth, rising
VinFast's revenues reached
Total revenues reached
Gross loss was
VinFast's gross profit margin showed significant improvement compared to the previous fiscal year. Gross margin was negative (
As part of its previously announced guidance, VinFast invested
Expanding Commercial Footprint and Product Offerings, Creating a Foundation for Future Growth
In FY 2023, VinFast accelerated its expansion efforts with a multi-pronged strategy to scale its commercial footprint, product offerings and manufacturing capabilities, setting the foundation for growth in 2024 and beyond.
In terms of product launches, VinFast introduced four new SUV models in
In the fourth quarter of 2023, VinFast made an important pivot from the capital-heavy, direct-to-consumer distribution model to a capital-light hybrid model with a strong focus on leveraging existing distribution infrastructure by building a dealership network in the
VinFast now has 13 stores and service centers in
The Company expects to reach approximately 130 points of sales in North American and 400 globally by the end of 2024, with sales through dealerships contributing a meaningful portion in the second half of the year.
2024 Focus: More VinFast EVs on the Road and Cost Reduction
In FY 2024, VinFast aims to balance revenue growth with cost optimization, building on its success in optimizing production and materials costs, and investing strategically in promising markets closer to home.
To put more VinFast vehicles on the road, VinFast will broaden the distribution channels through leveraging the local network and expertise of 3rd party dealerships and distributors.
Building awareness and success in high-profile markets like the
Earlier this month at the Indonesia International Motor Show (IIMS), VinFast announced its entry into the Indonesian market with the right-hand-drive VF 5, VF e34, VF 6, and VF 7 models. The look and feel of the cars, as well as the unique battery leasing option, received positive feedback.
The Company has not released pricing yet but already received an overwhelming number of deposits for its vehicles and thousands of leads of interest. VinFast also signed MoUs with three businesses at IIMS, solidifying its expansion in
In
VinFast's battery leasing policy has the potential to drive sales significantly in new markets. This mechanism brings the upfront price of VinFast vehicles and the monthly running cost down in line with or even more competitive than many gas-powered vehicles on the market today.
Cost optimization is the second key goal for the year. VinFast is pursuing initiatives to reduce material costs by
Business Outlook
VinFast targets delivery of 100,000 vehicles in FY 2024, leveraging a larger distribution network and supported by resilient and potentially recovering macroeconomic conditions.
Encouraging signs are emerging for VinFast in early 2024, particularly in
After laying a solid foundation in markets such as the US,
Conference Call
The Company's management will host its fourth quarter and full year 2023 earnings conference call at 8:00 AM
Live Webcast: https://edge.media-server.com/mmc/p/97n5zeka/
Q&A Participation: https://register.vevent.com/register/BIffc51cc3f8a04a119934deb5bc4af497
For additional information, please visit ir.vinfastauto.us.
About VinFast
VinFast - a subsidiary of Vingroup JSC - is
VinFast deliveries represent only one measure of the company's financial performance and should not be relied on as an indicator of quarterly financial results, which depend on a variety of factors, including the average selling price and various cost components.
Forward-Looking Statements
Forward-looking statements in this announcement, which are not historical facts, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1955. These statements include statements regarding our future results of operations and financial position, planned products and services, business strategy and plans, objectives of management for future operations of VinFast, market size and growth opportunities, competitive position and technological and market trends and involve known and unknown risks that are difficult to predict. As a result, our actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as "may," "will," "shall," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential," "goal," "objective," "seeks," or "continue" or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by us and our management, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: (i) the effect of the consummation of the business combination and the public listing of the Company's securities on its business relationships, performance, financial condition and business generally, (ii) the risk that the Company's securities may experience a material price decline and volatility in the price of such securities due to a variety of factors, (iii) the adverse impact of any legal proceedings and regulatory inquiries and investigations on the Company's business, (iv) the Company's potential inability to maintain the listing of its securities on Nasdaq, (v) the risk associated with the Company's limited operating history, (vi) the ability of the Company to achieve profitability, positive cash flows from operating activities and a net working capital surplus, (vii) the ability of the Company to fund its capital requirements through additional debt and equity financing under commercially reasonable terms and the risk of shareholding dilution as a result of additional capital raising, if applicable, (viii) risks associated with being a new entrant in the EV industry, (ix) the risks of the Company's brand, reputation, public credibility and consumer confidence in its business being harmed by negative publicity, (x) the Company's ability to successfully introduce and market new products and services, (xi) competition in the automotive industry, (xii) the Company's ability to adequately control the costs associated with its operations, (xiii) the ability of the Company to obtain components and raw materials according to schedule at acceptable prices, quality and volumes acceptable from its suppliers, (xiv) the Company's ability to maintain relationships with existing suppliers who are critical and necessary to the output and production of its vehicles and to create relationships with new suppliers, (xv) the Company's ability to establish manufacturing facilities outside of
All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above. You are cautioned not to place undue reliance on any forward-looking statements, which are made only as of the date of this announcement. VinFast does not undertake or assume any obligation to update publicly any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable law. If VinFast updates one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements. The inclusion of any statement in this announcement does not constitute an admission by VinFast or any other person that the events or circumstances described in such statement are material. Undue reliance should not be placed upon the forward-looking statements.
1 Includes VF e34, VF 5, VF 6, VF 8, VF 9 and e-bus
View original content to download multimedia:https://www.prnewswire.com/news-releases/vinfast-reports-unaudited-fourth-quarter-and-full-year-2023-financial-results-302068814.html
SOURCE Vinfast Auto LLC
FAQ
What was VinFast's revenue in the fourth quarter of 2023?
How much did VinFast's revenue grow year-over-year in FY 2023?
What is VinFast's target for vehicle deliveries in FY 2024?
What cost optimization initiatives is VinFast focusing on?
In which markets is VinFast planning to expand its sales network?
