Bau Duc - Hoang Anh Gia Lai's profit still grows despite revenue decline
Hoang Anh Gia Lai Joint Stock Company (HoSE: HAG) has just announced its consolidated business results for the third quarter of 2024 with net revenue of VND 1,432 billion (down 24% YoY). In terms of structure, the fruit segment brought in VND 880 billion (down 12% YoY); the pig farming segment brought in VND 234 billion (down 52% YoY); providing other goods and services reached VND 288 billion, unchanged from the same period.
Despite the decline in revenue, Hoang Anh Gia Lai's after-tax profit increased by 8%, reaching VND351 billion. The reason is that the company's gross profit margin increased sharply from 27% to 43%, thanks to contributions from the pork and fruit segments.
After 9 months, Mr. Duc's business brought in revenue of 4,198 billion VND, down 17% compared to the same period, but net profit reached 851 billion VND, up 20% compared to the same period. On average, Mr. Duc's business earned more than 3 billion VND per day.
The main driver for profit growth also comes from improved net profit margins and reduced financial costs. Not to mention that in the first 9 months of last year, the company recorded more than 350 billion VND from other profits (liquidation of assets), while this year this amount was negative 69 billion VND.
In 2024, Hoang Anh Gia Lai set a record revenue target of VND 7,750 billion and after-tax profit of VND 1,320 billion. Thus, the company has currently completed 54% and 64% of the plan, respectively.
If the plan is completed, 2024 will be the third consecutive year that HAGL reaches the trillion-VND profit milestone, moving closer to eliminating accumulated losses. With the profit achieved in the first 9 months of 2024, the company's accumulated loss will decrease to 626 billion VND.
At the end of the third quarter of 2024, Hoang Anh Gia Lai's total assets were nearly VND 22,500 billion, an increase of more than VND 1,500 billion compared to the beginning of the year. The largest proportion was receivables with nearly VND 10,000 billion. Particularly, receivables from loans of Hoang Anh Gia Lai Agrico and related units of this group were VND 1,015 billion, a decrease of VND 100 billion compared to the end of the second quarter of 2024.
The company's liabilities are at over VND13,500 billion, down nearly VND700 billion compared to the beginning of the year but up compared to the end of the second quarter. Of which, loans are over VND7,300 billion, down more than VND500 billion compared to the beginning of the year. The majority of the total debt is bond debt at BIDV and the bank's securities company with a value of over VND4,000 billion.
Regarding bank loans, Hoang Anh Gia Lai reduced its debt at TPBank and Sacombank, while increasing its loan at LPBank from VND750 billion at the beginning of the year to more than VND1,600 billion, and also borrowed an additional VND51 billion from HDBank.
Bau Duc's company is still slow to pay 4,500 billion VND in bonds
Although Hoang Anh Gia Lai's business activities have improved significantly, Mr. Duc's company continues to delay paying VND4,500 billion in principal and interest on bonds.
Specifically, more than 2 weeks ago, Hoang Anh Gia Lai announced a delay in payment of more than 4,500 billion VND in principal and interest of bonds with code HAGLBOND16.26 issued on December 30, 2016.
Of which, HAGL will be late in paying more than VND3,484 billion in interest and more than VND1,015 billion in principal. The expected payment time is in the fourth quarter.
The reason for the delay in payment, according to HAGL, is that it has not yet collected enough money from the debt of Hoang Anh Gia Lai International Agriculture JSC (a 3-party debt repayment schedule has been agreed upon) and has not yet liquidated some unprofitable assets.
It is also because of these things that Ernst & Young Vietnam Auditing Company Limited concluded that "there is the existence of a material uncertainty that may cast significant doubt on Hoang Anh Gia Lai's ability to continue as a going concern".
Although Hoang Anh Gia Lai will only increase its herd in May this year, with large resources mobilized from outside, the size of its pig herd promises to increase significantly. Hoang Anh Gia Lai also expects to record profits from the end of this year and if pig prices are good by 2025 (similar to current market conditions), Hoang Anh Gia Lai will "take it all".
Previously, Hoang Anh Gia Lai's business performance was very positive, with many good prospects.
According to the audited consolidated financial report for the first 6 months of the year, Hoang Anh Gia Lai's revenue decreased by 11% compared to the same period, reaching only nearly 2,800 billion VND, but its after-tax profit reached more than 500 billion VND, an increase of 30% compared to the same period.
The main products of the company chaired by Mr. Duc, such as durian and banana, all have favorable output and high selling prices.
Sharing with shareholders at the 2024 Annual General Meeting of Shareholders, Mr. Duc said that he will strive to eliminate accumulated losses by the end of this year in many different ways.
In 2024, Hoang Anh Gia Lai expects fruit tree revenue to contribute VND 5,540 billion, accounting for 71% of total revenue; banana-fed pig revenue to contribute VND 1,550 billion, accounting for 20% of total revenue; and other products and goods to contribute VND 660 billion, accounting for 9% of total revenue.
Hoang Anh Gia Lai has placed high expectations on the durian sector in the second half of 2024. Hoang Anh Gia Lai is following the 2-tree, 1-animal model, and all 3 products, pigs, durians, and bananas, are being evaluated as doing well. Hoang Anh Gia Lai owns 1,200 hectares of durian in Laos and this year is the first year of fruiting on an area of 200 - 300 hectares.
Mr. Doan Nguyen Duc - Chairman of Hoang Anh Gia Lai informed that with 300 hectares about to be harvested, the company expects to have revenue of hundreds of billions of VND. By 2025 - 2026, this number will reach thousands of billions of VND.
Hoang Anh Gia Lai also continuously changed its core areas, from real estate to sugarcane and rubber agriculture; then shifted to cattle farming; moved to fruit and pig farming; and most recently, durian growing.
Hoang Anh Gia Lai expects that its 2024 revenue will increase dramatically in the fourth quarter, when it officially exploits a part of the durian area. Of which, durian grown in Vietnam (main crop) will have revenue in August-September 2024 and durian grown in Laos (off-season crop) will have revenue in October and December 2024. Mr. Duc expects Hoang Anh Gia Lai to sell off-season durian at a price of VND100,000/kg or more.
Source: https://danviet.vn/doanh-thu-sut-giam-loi-nhuan-sau-thue-cua-hoang-anh-gia-lai-van-tang-nho-mang-lon-trai-cay-20241018094233674.htm
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