Hanoi (VNS/VNA) -Some UPCOM-listed companies are enjoying stable earnings brought by jointventures they established with foreign partners, but their core businessesremain insignificant.

These joint ventures areusually foreign direct investment (FDI) projects in which State-ownedenterprises contribute capital and land use rights, while foreign companiescontribute money and technology.

The Vietnam Engine andAgricultural Machinery Corporation (VEAM), which makes engines, agriculturalmachinery, automobiles and motorbikes, possesses major stakes in three jointventures, namely Honda Vietnam (30 percent), Toyota Vietnam (20 percent) andFord Vietnam (25 percent).

VEAM's profits mainly come fromthese three joint ventures.

The firm's plentiful revenuefrom financial activities was also thanks to the dividends collected from itsjoint ventures.

The 2018 financial statementsshowed net revenue from the main business activities of VEAM reached 7.07trillion VND (304.2 million USD), but the company achieved 7.04 trillionVND in post-tax profit.

In 2019, VEAM achieved revenueof 685 billion VND and suffered a loss of 337 billion VND in its mainbusiness.

But thanks to the large volumeof revenue from financial activities of 7.8 trillion VND, at the end of theyear, the company still achieved a post-tax profit of 7.04 trillion VND.

When spare parts manufacturerPetroVietNam Machinery-Technology JSC (PVM) was a State-ownedenterprise 25 years ago, it held 30 percent each in joint ventureswith Japanese partners Nippon Seiki, Showa and FCC, all specialising inmanufacturing auto and motorcycle parts.

After equitisation, PVM nowonly holds 10 percent capital in the joint venture with FCC, 10 percent withNippon Seiki and 8.45 percent with Showa.

These all are leadingenterprises in the spare parts industry, supplying spare parts for Honda,Yamaha, and Suzuki. These joint ventures earn trillions of VND of profitseach year and produce profits up to 80-100 billion VND for PVM every year.

In 2016, PVM earned more than 100billion VND of dividends and distributed profits collected from joint ventures.It earned nearly 84 billion VND in 2017, 80 billion VND in 2018 and 81.3billion VND in 2019.

PVM’s core businesses onlyhelped it achieve profits of 21 billion VND in 2019, 15.7 billion VND in2018 and 27.8 billion VND in 2017.

Vietnam Forestry CorporationJSC (Vinafor or VIF) also enjoys earnings from joint ventures with Yamahafrom Japan, Hong Leong Industry from Malaysia, Sojitz Corporation from Japanand JK Paper from India.

In 2018 and 2019, theprofits Vinafor earned from these joint ventures accounted for about 90 percentof its profit structure.

Binh Duong Production andTrading Goods Corporation (PRT) is the Vietnamese partner in the FDI jointventure FrieslandCampina Vietnam Co Ltd, familiar to consumerswith brands like Dutch Lady, Friso, YoMost, Fristi and Completa.

The main profit of the companycomes from FrieslandCampina. PRT achieved dividends and distributed profitsfrom this joint venture of 402.8 billion VND and 539.2 billion VND in 2018 and2019, respectively.

Waiting for restructuring

Shareholders ofthese companies are looking forward to restructuring.

PVM has manyconveniently-located land plots such as a 2,000sq.m land plot at Trang ThiStreet, Hoan Kiem District in Hanoi; 23,600sq.m in Dong Anh District, Hanoi;137sq.m in Thanh Xuan District, Hanoi; and 1,500sq.m at 25 Mong CaiStreet in Quang Ninh City.

However, earning results fromthe main businesses remain poor. At general meetings of shareholders everyyear, shareholders question leaders about the use of those land plots andrequest company restructuring, streamlining apparatus and increasing businessefficiency.

At this year's meeting, PVMshareholders questioned the efficiency of the Centre of International LabourCo-operation and Service.

This centre reported revenue of790 million VND in 2019, only 13 percent of the yearly goal.

The shareholders even suggestedPVM's leaders consider dissolving the centre.

The cumbersome apparatus,ineffective operation of many departments and divisions,consume two-thirds of the dividends collected from the company’s jointventures every year, the shareholders said.

Similarly, at the AnnualGeneral Meeting of Shareholders of Vinafor, shareholders complained that threeyears after equitisation, Vinafor's profits still rely largely on jointventures.

Shareholders requested thecompany improve the efficiency of the afforestation and wood processingsegments to improve the profit structure and avoid relying too much on dividendsfrom the joint venture./.