Hoang Anh Gia Lai International Agriculture (HNG) establishes subsidiary in Laos
Recently, the Board of Directors of Hoang Anh Gia Lai International Agriculture Joint Stock Company - HAGL Agrico (Code HNG) announced the establishment of Southern Laos Agri Investment and Agricultural Production and Business Company Limited.
The company's charter capital is approximately 8.3 billion Kip, equivalent to 400 million USD, 100% owned by HAGL Agrico. The company's headquarters is located in Saysettha District, Attapeu Province, Laos. The legal representative is Mr. Tran Bao Son, Director and Member of the Board of Directors.
Despite consecutive losses, HNG still established a subsidiary in Laos with a capital of 400 million USD (Photo TL)
The newly established company will operate in the fields of agricultural production, hotel services, supply of materials, machinery, equipment, specialized means of transport in agriculture, transfer of techniques and technology to serve agricultural production investment.
According to HAGL Agrico's Q3 financial statements, this unit has two subsidiaries in Laos, namely Hoang Anh - Quang Minh Rubber Industry and Agriculture Company Limited and Hoang Anh Attapeu Agricultural Development Company Limited. Thus, Southern Laos Agri will be the third company of HAGL Agrico established in Laos.
Losses for 10 consecutive quarters, accumulated losses have reached nearly 7,500 billion VND
HNG's business picture over the past 3 years can only be summed up in two words: "loss". Since the second quarter of 2021, HNG has not been able to report a profit in any business period.
The situation of cost of goods sold increasing higher than revenue caused the company to suffer losses right from its main business activities. The loss continuously increased to hundreds of billions of VND each quarter and peaked in the fourth quarter of 2022 with 2,793.4 billion VND.
In the most recent third quarter of 2023, HAGL Agrico recorded net revenue of VND160 billion, down 16% compared to the same period last year. Of which, the fruit tree segment only brought in revenue of VND84 billion, the rubber segment brought in VND55 billion, down 13%. The company recorded a net loss of VND199 billion, marking the 10th consecutive quarter of loss for this unit.
The continued losses have increased the company's total accumulated losses to VND7,449.6 billion. Meanwhile, the owner's equity recorded at VND11,085.5 billion is now only VND2,899 billion. Thus, the owner's equity has been almost completely eroded after months of HNG's loss-making business.
Cash balance is only 16.5 billion VND, Mr. Duc completes capital withdrawal
Regarding the asset structure of HAGL Agrico, at the end of the third quarter of 2023, the company's total assets were recorded at VND 14,143.8 billion. Of which, cash and cash equivalents were only VND 16.5 billion. It should be noted that this is an extremely low cash level compared to the asset size of VND 14,143.8 billion of HNG. The company also did not record any significant bank deposits on the financial statements.
Most of HNG's assets are recorded in the form of fixed assets, accounting for VND5,550.1 billion, and long-term unfinished construction costs accounting for VND4,272.8 billion.
In the capital structure of the enterprise, payables currently account for VND 11,244.9 billion, equivalent to nearly 80% of total capital. Short-term debt currently accounts for VND 6,941.3 billion, long-term debt accounts for VND 902.6 billion. Thus, the total short-term and long-term debt of HNG is 2.7 times higher than equity, not including other payable obligations.
In another development, in May 2023, HNG shareholders were also surprised when Mr. Doan Nguyen Duc (Bau Duc) withdrew all capital from HNG. At that time, HNG was traded around VND 6,300/share. Currently, in the trading session on December 27, 2023, HNG is only traded at VND 4,280/share.
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