RED RIVER COAL JOINT STOCK COMPANY

RED RIVER COAL JOINT STOCK COMPANY: Rising Revenue, Declining Profitability

RED RIVER COAL JOINT STOCK COMPANY (Vietnamese: CÔNG TY CỔ PHẦN THAN SÔNG HỒNG), also known by its short name RERICO, is a privately held joint stock company headquartered at No. 30 Dien Bien Phu Street, Dien Bien Ward, Ba Dinh District, Ha Noi City, Vietnam. The company operates under Business ID 0102327935 and has been active since its registration on July 20, 2007. RERICO specializes in the wholesale trading of coal and other solid, liquid, and gaseous fuels, with additional registered activities in mining and transport logistics.

In 2023, the company posted its highest-ever revenue at USD 230.54 million, a 32.67% increase over 2022. This surge in top-line performance is noteworthy given the volatility of global commodity markets, and it places RERICO among the higher-revenue performers in its sector based on scale. However, the underlying financial strength tells a more complex story.

Despite this revenue growth, net profit declined by 45.09%, from USD 398,976 in 2022 to just USD 219,076 in 2023. This sharp decline suggests deteriorating margins, possibly due to increased input costs, unfavorable contract terms, or pricing pressure in a competitive coal trading environment. In addition, owner’s equity dropped by 6.27%, settling at USD 3.24 million, while the company’s total assets slightly fell by 2.72%, now valued at USD 13.51 million.

A more alarming figure is the working capital, which, although not negative, stands at a low USD 2.76 million, indicating limited short-term financial flexibility. With only about 100 employees, RERICO operates a lean structure, but the drop in profit against surging sales signals operational inefficiencies or disproportionate cost increases that merit immediate attention.

RED RIVER COAL JOINT STOCK COMPANY is majority-owned by Dong Bac Corporation, holding 54.62% of the shares, with the rest owned by other private shareholders. While this state-linked parent company provides some backing, the actual performance of RERICO must be independently analyzed, especially in light of its weakening profitability.

From a financial analyst’s standpoint, the key takeaway is this: RERICO's revenue expansion has not translated into sustainable earnings growth. A deeper review is needed into the company's cost structure, margin evolution, and capital efficiency. For suppliers, investors, or logistics partners, relying solely on revenue figures is insufficient.

To accurately assess creditworthiness and financial risk, VANGUARD BUSINESS INFORMATION LLC (VBI)provides in-depth financial assessments, ratio analysis, and operational risk diagnostics. In cases like RERICO, where headline growth masks profit deterioration, VBI’s reports are essential to inform partnership, financing, or procurement decisions.