Dua Fat Group reports 2025 net loss of 724.9 billion, negative equity and a qualified audit opinion

In 2025, Dua Fat Group Joint Stock Company reported a net after-tax loss of 724.9 billion VND, widening 56.7% from the 462.5 billion VND loss recorded in 2024. The cumulative loss increased to 1,287.1 billion VND, driving equity to deteriorate from a positive 237.8 billion VND to negative 487.1 billion VND by year-end 2025.

Liabilities rise and leverage worsens

As of December 31, 2025, the group’s total liabilities increased to 3,192.8 billion VND, up 4.6% year-on-year. The debt ratio to total assets rose from 0.93x to 1.18x, indicating liabilities exceeded asset value. The debt-to-equity ratio turned negative as equity was fully eroded, highlighting elevated financial leverage risk.

Debt structure and payables pressure

In the group’s debt structure, bank borrowings decreased 5.5% to 1,585.6 billion VND, while bond debt fell 12.3% to about 307.7 billion VND. However, financial pressure intensified as other payables rose 26.9% to 1,299.5 billion VND. Accrued expenses increased 45.9% to 626.6 billion VND, reflecting a buildup of financial obligations amid weakening cash flow.

Liquidity deteriorates

Liquidity metrics continued to weaken. The current ratio fell from 0.94x to 0.76x, and the quick ratio declined from 0.63x to 0.60x—both below safety thresholds. The interest coverage ratio was deeply negative at -3.09x, indicating the group generated insufficient earnings to cover interest expenses and faced heightened financial risk.

Profitability declines

Operating efficiency also deteriorated. Return on assets (ROA) declined from -14.0% to -27.0%. Return on equity (ROE) became not meaningful due to negative equity, but it still reflected the severity of sustained losses.

Qualified audit opinion and reporting limitations

Moore AISC Audit and IT Services Limited issued a qualified opinion on the company’s 2025 financial statements. The auditors stated they could not participate in cash counts as of December 31, 2025, and could not verify the cash balance due to ongoing fluctuations after the close. The audit also noted that several accounts receivable confirmations sent to customers, suppliers and lenders were not fully responded to by the end of the audit, reducing the reliability of related accounting data.

Operational difficulties and cash constraints

The audit highlighted significant operational challenges. The Trung Nam Ca Ná Port project was stalled because the investor, Trung Nam Ca Ná International Port Joint Stock Company, lacked funds, preventing payment to Dua Fat Group. As a result, the company had no cash to pay suppliers and transferred a debt payable of 129.9 billion VND to the investor under a three-party agreement.

Loan recovery issues and going-concern concerns

The group also faces difficulties recovering nonperforming loans totaling over 700 billion VND. This contributed to late repayments of loans and finance leases, and short-term debt exceeding current assets—signals of liquidity risk and going-concern concerns.

Cost-cutting measures, but core issues remain

In response to the situation, the company cut staff and streamlined operations to reduce operating costs. However, the measures are described as stop-gap actions while key issues related to cash flow, operating efficiency, and capital structure remain unresolved.

With large losses, negative equity, and a qualified audit opinion, Dua Fat Group’s financial position remains a cause for concern. Near-term recovery, according to the information provided, will depend heavily on cash-flow remediation, debt collection, and restructuring of business operations.