Continuously reporting hundreds of billions in profits each quarter, Hoang Anh Gia Lai (HAG) is still slow in paying bond interest.
Regarding the overall business situation, perhaps on the HoSE floor, there are few units reporting profits as large as Hoang Anh Gia Lai (HAG). The most recent loss recorded by this unit was from the first quarter of 2021 with a loss of 68.8 billion VND after tax.
Since then, HAG has continuously reported profits with revenue reaching VND 1,697 billion in the first quarter of 2023, and after-tax profit increasing to VND 303.4 billion. It can be seen that HAG has reported profits for more than 8 consecutive quarters.
Hoang Anh Gia Lai (HAG) has only over 50 million VND in cash left, has not paid bond interest for 2 consecutive periods (Photo TL)
However, Hoang Anh Gia Lai is still having problems with cash flow because most recently, this unit failed to pay interest for the second time on a bond lot worth VND5,271 billion.
Specifically, in the first 6 months of the year, HAG has not paid interest for 2 periods for the bond lot coded HAGLBOND16.26. The first interest payment on March 30, 2023 is 177.9 billion VND, the second payment on June 30, 2023 is 177.9 billion VND.
The HAGLBOND16.26 bond lot was issued on June 30, 2016 with a term of 10 years, with a par value of VND 6,596 billion. The current outstanding bond amount is VND 5,271 billion.
Hoang Anh Gia Lai explained that the source of payment came from the debt of Hoang Anh Gia Lai International Agriculture JSC (HNG) and its subsidiaries. There is currently a 3-party debt repayment schedule agreement and some of HNG's assets are being liquidated to get money to pay the debt.
Q2/2023 net loss from business activities 162.9 billion
Although continuously reporting profits, it is noteworthy that HAG's business activities in the second quarter recorded a net loss from business activities.
Specifically, in the second quarter of 2023, the company achieved revenue of VND 1,450 billion. Cost of goods sold accounted for VND 1,264.3 billion, making gross profit only VND 185.7 billion. Financial revenue reached VND 107.2 billion.
Notably, financial expenses have decreased sharply from VND875.9 billion in the same period to VND362.9 billion. However, interest expenses have increased from VND223.6 billion to VND266.7 billion, showing that the company is having to increase its debt, causing interest expenses to increase instead of decreasing.
Business management expenses without any provision for refunds accounted for 35.6 billion VND, sales expenses accounted for 46.2 billion VND. Overall, HAG had a net loss of 162.8 billion VND from its main business activities.
HAG only escaped losses thanks to a sudden increase of more than 11 times in other income, from 24.7 billion to 273.8 billion VND. If it were not for this unusual profit, HAG would almost certainly have had to report a loss in the second quarter of 2023.
HAG's ability to continue operating is doubted by auditors, cash is only over 50 million VND
Ernst & Young Vietnam Co., Ltd. conducted the 2023 semi-annual audit report of HAG and pointed out a number of notable issues. In which, the audit emphasized the accumulated loss of VND 2,959.5 billion on the financial statements.
In addition, the auditor also noted that the company's short-term debt exceeded its short-term assets by VND2,004 billion. This will cause risks in HAG's capital management.
With the above issues, the auditors have expressed doubts about Hoang Anh Gia Lai's ability to continue as a going concern.
In addition to the accumulated loss of nearly VND 3,000 billion mentioned above, HAG is also violating a number of commitments to the bond contract and has not yet paid a number of principal and interest debts due.
As of June 30, 2023, HAG's total assets reached VND 21,342.4 billion. Notably, the cash in HAG's assets was only VND 50 million.
The company's assets amount to VND4,346.1 billion in the form of receivables, meaning that the money has not actually been received. Inventory accounts for VND1,258.7 billion.
In HAG's capital structure, liabilities account for 15,954.4 billion VND, 3 times higher than equity. Of which, short-term debt accounts for 4,189.8 billion VND, long-term debt accounts for 3,895.1 billion VND.
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