Vietnam jewellery giant PNJ forecasts loss after diamond scandal

PHU NHUAN Jewelry (PNJ), Vietnam’s largest listed jewellery retailer, plans to slash its 2026 revenue target and forecasts a 6.27 trillion dong (US$241 million) loss as it sets aside a huge provision for customer buybacks following a diamond-smuggling scandal.

PNJ will propose cutting its revenue goal to 39.06 trillion dong from 48.66 trillion dong previously, it said in an emailed statement.

It will set aside a 7.07 trillion dong provision for potential losses tied to its exchange and repurchase policy.

“Adjusting the target, anticipating provisions and preparing capital are part of PNJ’s comprehensive assessment of the impacts and proactive implementation of necessary changes during the restructuring phase,” PNJ said.

The overhaul shows the financial fallout facing one of Vietnam’s best-known consumer companies after a smuggling investigation shook confidence in the diamond trade.

PNJ is now trying to shore up its balance sheet, rebuild customer trust and reshape its store network while dealing with weaker margins and difficult conditions in the diamond market.

Without the buyback provision, PNJ projects after-tax profit of about 800 billion dong in 2026, below its original target of about 3.41 trillion dong.

The revised targets and provision will be put to shareholders at an extraordinary meeting on Oct 21.

PNJ separately plans to raise as much as 8 trillion dong to fund its turnaround and working-capital needs over the next three years, according to another statement.

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Details of the fundraising will be presented at the October meeting. About 700 billion dong of a loan from chairwoman Cao Thi Ngoc Dung’s family has already been disbursed.

The strain is already showing in PNJ’s latest results. The company posted a loss of about 61 billion dong in July and August even as revenue rose 4.5 per cent from a year earlier.

Its gross margin fell to about 10 per cent from roughly 18.5 per cent, with PNJ citing the margin decline, unfavourable developments in the diamond market and seasonal factors.

The troubles followed the detention of Dang Ngoc Thao, former head of PNJ’s wholly owned gem-certification unit PNJ-LAB, in a transnational diamond-smuggling probe.

Police said in August that more than 30,000 diamonds linked to the case were sold to individual customers and did not enter PNJ’s retail network.

Investigators said PNJ had complete import documentation and that its own diamond distribution complied with regulations. BLOOMBERG