Hoa Phat Group Joint Stock Company has just officially announced its financial report for the first quarter of 2024, which recorded revenue from sales and service provision reaching 31,092 billion VND, an increase of more than 5,000 billion VND compared to the same period last year. Cost of goods sold increased, sales expenses and business management expenses also increased, net profit from business activities recorded 2,887 billion VND, nearly 6 times higher than the same period last year.
After deducting additional costs, Hoa Phat reported a profit after tax of VND 2,869 billion, this number corresponds to the profit that Chairman Tran Dinh Long disclosed in advance to shareholders during the annual general meeting of shareholders. recently.
Explaining the sharp increase in profits, the business’s leadership said it was mainly due to a sharp increase in crude steel consumption, good cost of goods, and good selling prices.
On the balance sheet, Hoa Phat’s inventory is 42,714 billion VND, an increase of more than 8,000 billion VND compared to the figure at the beginning of the year.
Notably, Hoa Phat’s debt is at a record high. As of the end of the first quarter of 2024, Hoa Phat recorded liabilities of VND 96,315 billion, a sharp increase compared to the beginning of the year figure of VND 84,946 billion. In particular, total financial debt amounted to more than 77,500 billion VND at the end of the quarter, an increase of more than 12,000 billion VND compared to the beginning of the year and this is the highest level in operating history.
Both short-term and long-term debt of Hoa Phat increased sharply in the first quarter of 2024. Of which, short-term debt increased by nearly 6,500 billion VND compared to the beginning of the year to more than 61,400 billion VND, the highest ever. Long-term debt also increased by nearly 5,700 billion compared to the beginning of the year to nearly 16,100 billion VND, recording the highest level since the end of the third quarter of 2021.
Hoa Phat’s interest expense decreased from VND 989 billion in the same period last year to VND 635 billion this year. Of which, realized exchange rate loss was 231 billion VND and unrealized exchange rate difference loss was an additional 184 billion VND.
Talking about the debt situation, at the recent Annual General Meeting of Shareholders, Mr. Tran Dinh Long said that Hoa Phat is minimizing foreign currency loans. At the end of the first quarter, the Company borrowed 400 million USD in foreign currency and made a provision of 200 billion VND, so the Company applied many measures to reduce risks.
In the near future, Hoa Phat will not increase financial leverage. Many companies have had to face the consequences.
Hoa Phat has prepared a large amount of cash for the Dung Quat 2 project. This is not money that the Company does not use but is reserved for “iron fists”. Hoa Phat also cannot use money to invest or hold real estate, but must prepare for production and business.
In 2024, Hoa Phat targets revenue of 140,000 billion VND, an increase of 16% over the same period and after-tax profit of 10,000 billion VND, an increase of 47% compared to 2023, with a dividend of 10%. If the plan is completed, this will be the 3rd highest revenue in Hoa Phat’s operating history and highest profit after tax from 2022.
At the congress, Chairman Hoa Phat admitted: “The current steel industry is much more fierce than I thought.” However, the company still plans to invest 5 billion USD in the steel project in Phu Yen – equivalent to Dung Quat 2. “We want to become one of the 50 largest steel companies in the world. If we do not change If we don’t change or upgrade, we will be crushed,” Mr. Long affirmed.
Thus, Hoa Phat’s strategy has had a certain change. Previously, at the 2021 Annual General Meeting of Shareholders, Hoa Phat Chairman Mr. Tran Dinh Long once said: No one can make steel forever. Hoa Phat, like every other corporation, sooner or later multi-industries and one of those directions is real estate. “We are reputable and famous in the market. Last year, we continuously went to the local area to explore to develop low cost projects. It has always been like that, in the past, now and in the future. will find projects to M&A and only M&A when it is sure to be profitable,” Mr. Long once said.
