Hoa Sen plans to earn a minimum profit of VND 400 billion in the fiscal year 2023-2024

Hoa Sen Group Joint Stock Company (code HSG - HoSE) announced documents for the Annual General Meeting of Shareholders on March 18, 2024, the meeting is expected to be held in Ho Chi Minh City.

In the 2023-2024 fiscal year (from October 1, 2023 to September 30, 2024), Hoa Sen Group plans to do business with two scenarios. In which, scenario 1 has a consumption output of 1,625 thousand tons, an increase of 13.3% over the same period, expected revenue of VND 34,000 billion, an increase of 7.4% over the same period and expected after-tax profit of VND 400 billion, an increase of 12.33 times compared to the implementation in the 2022-2023 fiscal year.

Scenario 2, total estimated consumption output is 1,730 thousand tons, up 20.7% over the same period, estimated revenue is 36,000 billion VND, up 13.7% over the same period, and expected after-tax profit is 500 billion VND, up 15.67 times compared to the implementation in the 2022-2023 fiscal year.

Previously, in the 2022 - 2023 fiscal year (from October 1, 2022 to September 30, 2023), Hoa Sen Group recorded revenue of VND 31,650.7 billion, down 36.3% over the same period and profit after tax of VND 30.06 billion, down 88% over the same period. In which, gross profit margin decreased from 9.9% to only 9.7%.

It is known that in the fiscal year 2022 - 2023, Hoa Sen Group sets a business plan based on two scenarios.

In the first scenario with a finished product output of 1.4 million tons, the Company plans to have revenue of VND34,000 billion, down 32% year-on-year, and expected after-tax profit of VND100 billion, down 60% year-on-year.

The second scenario is more positive with finished product output of 1.5 million tons, estimated revenue of VND36,000 billion, down 28% year-on-year, and expected after-tax profit of VND300 billion, up 20% year-on-year.

Thus, at the end of the 2022-2023 fiscal year, with a profit of only VND 30.06 billion, Hoa Sen Group completed 30.1% of the conservative plan of VND 100 billion and completed 10% of the aggressive plan of VND 300 billion in profit.

With only 30% of the cautious plan and 10% of the aggressive plan completed, in the upcoming General Meeting, Hoa Sen Group will present to shareholders a plan to pay dividends for the 2022-2023 fiscal year at a rate of 5% in cash.

Continue restructuring to soon list Hoa Sen Plastics JSC

In addition, in the upcoming Congress, Hoa Sen Group will also submit to shareholders for approval the restructuring and specialization of the steel pipe production and business sector. In particular, Hoa Sen Plastic Joint Stock Company, after receiving the transfer of the plastic production and business sector, has been operating effectively, demonstrating high initiative in the management and operation of the plastic production and business sector.

In the future, Hoa Sen Plastics Corporation will issue shares to the public and list shares on the Stock Exchange.

Therefore, Hoa Sen Group submitted to shareholders for consideration the conversion of Hoa Sen Phu My One Member Co., Ltd. into Hoa Sen Steel Pipe Joint Stock Company, with Hoa Sen Group owning 99% of the charter capital. The unit will receive all infrastructure serving steel pipe production and business activities, with the expected implementation time and roadmap from 1 to 5 years.

After Hoa Sen Steel Pipe JSC completes the acquisition of the steel pipe manufacturing sector and puts it into stable and profitable operation, the Company will submit to shareholders for consideration and approval of the plan to issue shares to the public and list.

For the Hoa Sen Home system, Hoa Sen Group will continue to consolidate and improve operational efficiency, production and business efficiency, and prepare the best conditions for converting the Hoa Sen Home system into Hoa Sen Home Joint Stock Company.

Regarding personnel, after the end of the 2018-2023 term, Hoa Sen Group will also re-elect the Board of Directors for the new term 2024-2029.

Hoa Sen increases debt as it increases inventory accumulation in the first quarter of fiscal year 2023-2024

In terms of business activities, previously, in the first quarter of the 2023-2024 fiscal year (from October 1 to December 31, 2023), Hoa Sen Group recorded revenue of VND 9,073.22 billion, an increase of 14.6% over the same period, and recorded a profit of VND 103.36 billion compared to a loss of VND 680.23 billion in the same period, an increase of VND 783.59 billion. In which, the gross profit margin improved from 2% to 10.5%.

During the period, gross profit increased by 493.7% over the same period, equivalent to an increase of VND 789.72 billion, to VND 949.69 billion; financial revenue increased by 36.5%, equivalent to an increase of VND 11.71 billion, to VND 43.76 billion; financial expenses decreased by 56.4%, equivalent to a decrease of VND 64.05 billion, to VND 49.55 billion; sales and administrative expenses increased by 9.3%, equivalent to an increase of VND 71.3 billion, to VND 839.26 billion, and other activities fluctuated insignificantly.

Thus, in the first quarter of the 2023-2024 fiscal year, Hoa Sen Group recorded profits again, mainly due to positive revenue growth, while gross profit margin improved sharply, leading to strong profit growth.

Contrary to the improved profit picture, in the first quarter of the 2023-2024 fiscal year, Hoa Sen Group recorded negative operating revenue of VND 672.9 billion compared to a positive VND 1,853.8 billion in the same period. In addition, investment cash flow was positive VND 13.5 billion and financial cash flow was positive VND 1,748.1 billion, mainly due to increased debt to offset the cash flow deficit.

In terms of asset size, as of December 31, 2023, Hoa Sen Group's total assets increased by 8.3% compared to the beginning of the period, equivalent to an increase of VND 1,433.1 billion, to VND 18,798.4 billion. Of which, the main assets in inventory were recorded at VND 8,025.3 billion, accounting for 42.7% of total assets; fixed assets were recorded at VND 4,763.8 billion, accounting for 25.3% of total assets; short-term receivables were recorded at VND 2,415.1 billion, accounting for 12.9% of total assets; cash and short-term financial investments were recorded at VND 1,709.7 billion, accounting for 9.1% of total assets, etc.

During the period, inventories increased by 5.2% compared to the beginning of the period, equivalent to an increase of VND 396.7 billion, to VND 8,025.3 billion; cash and short-term financial investments increased by 174.4% compared to the beginning of the period, equivalent to an increase of VND 1,086.6 billion, to VND 1,709.7 billion...

Regarding capital, at the end of the first quarter of the 2023-2024 fiscal year, Hoa Sen Group's total short-term debt increased by 59.5% compared to the beginning of the period, equivalent to an increase of VND 1,748.1 billion, to VND 4,684.4 billion and accounting for 24.9% of total capital (at the beginning of the period, it recorded VND 2,936.3 billion and accounted for 16.9% of total capital).

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