The Vietnamese digital media conglomerate (HoSE code: YEG) reported an 80 percent drop year-on-year in operating profit (gross profit deducting operating expenditure, before tax) in the first quarter of this year. It fell from VND50.7 billion ($2.18 million) to VND10 billion ($429,365).

The company board also pointed to rising costs of marketing and operating. However, revenues in the first quarter were up 17.5 percent at VND388 billion ($16.65 million), but gross profits fell by 50 percent to VND48.7 billion ($2.09 million), as a result of costs of goods sold rising by three times the growth in sales.

In fact, the company might have ended the quarter in red but for interest from investments and dividends from subsidiaries.

The biggest setback occurred when YouTube claimed SPRINGme Pte. Ltd, a Thai company owned indirectly by Yeah1 (16.93 percent), had violated its policies with some of its channel management activities.

YouTube ended up announcing the termination of all content hosting services agreements (CHSA) after March 31 with all of YEG’s subsidiaries and investment companies.

YEG negotiated in vain to salvage these deals.

In 2018 its activities connected to YouTube had generated revenues of around VND462 billion ($19.93 million), or nearly 28 percent of all revenues, which it has lost now.

The company had to sell off ScaleLab, which relies on YouTube for its revenues, in March, just two months after acquiring it.

YEG’s stock is now trading at VND 112,000 ($5.24), 55 percent lower than it was immediately before the crisis and nearly 70 percent down from its peak on IPO day.