Business is down, some quarters have losses of hundreds of billions of dong
Considered a reputable unit in the field of agricultural production, Loc Troi Group Corporation is facing many difficulties with periods of business losses.
From the beginning of 2023 to now, in 5 business quarters, Loc Troi has reported losses in 3 quarters. At its peak in the 3rd quarter of 2023, Loc Troi reported a loss of up to 327 billion VND. This is a record high loss that Loc Troi has never seen since being listed on the Vietnamese stock exchange.
Loc Troi Group (LTG) lost hundreds of billions and got into a scandal over owing farmers rice money (Photo TL)
The huge losses in the first and third quarters have almost wiped out all of Loc Troi's operating profits. In 2023, LTG reported a profit of only VND16 billion, down 96% compared to 2022.
Entering 2024, in the first quarter, Loc Troi recorded net revenue of VND 3,849 billion, an increase of 57% over the same period. However, the company still reported a net loss from business operations of VND 132 billion. As a result, LTG still had a loss after tax of VND 95 billion, VND 14 billion higher than the loss in the same period.
One of the main reasons for Loc Troi's losses came from financial costs, which increased from VND 147 billion to VND 188 billion. Of which, interest expenses accounted for VND 127 billion and tended to increase. Combined with input material costs and losses due to exchange rates, LTG had to report a loss in the first quarter of 2024.
Loc Troi and the rice debt scandal of farmers
Previously, Loc Troi was also caught up in a scandal of owing farmers hundreds of billions of dong in rice money. According to a report from the Department of Agriculture and Rural Development of An Giang province, in the 2023-2024 winter-spring crop alone, Loc Troi Group owed 900 farming households money to buy rice. The total amount of rice money that Loc Troi owed was up to 245 billion dong.
Looking at the Q1/2024 financial statements of Loc Troi Group, it is not difficult to understand why this unit is facing cash flow difficulties, at least in the short term.
By the end of the first quarter of 2024, the company's total assets amounted to VND 11,913 billion, but cash and cash equivalents were only VND 106 billion. The imbalance in cash in assets has caused many difficulties for Loc Troi in paying operating expenses, interest expenses, etc.
Meanwhile, the company recorded up to VND6,622 billion in receivables, with VND6,472 billion in receivables from customers. These are amounts that Loc Troi has only recorded on paper but has not actually collected from customers. LTG is even having to record VND490 billion in provisions for short-term bad debts.
Regarding capital structure, Loc Troi currently records payable debt of VND8,939 billion, equivalent to 75% of assets being debt. Short-term debt is also accounting for VND6,246 billion, twice as high as equity, also showing potential risks.
Loc Troi's cash flow statement also shows that the unit's revenue is often not enough to cover expenses. Net cash flow from operating activities was negative VND434 billion in the first quarter, and in the same period last year it was even negative VND2,710 billion. The cash flow deficit forced Loc Troi to increase borrowing to make up for the cash shortage, and interest expenses continued to increase, putting further pressure on business results.
Will the new element in the Board of Directors make a difference?
Faced with difficulties in business operations, the Board of Directors and members of the Board of Supervisors for the new term 2024-2029 of Loc Troi were elected with many new faces.
The new Board of Directors includes: Huynh Van Thon (continuing to hold the position of Chairman of the Board of Directors), Mr. Johan Sven Richard Boden, Mr. Mandrawa Winston Leo, Mr. Vo Tri Thanh and Ms. Vu Hong Trang.
Among them, Ms. Vu Hong Trang is currently Deputy Director of Affirma Capital (Singapore); Mr. Mandrawa Winston Leo is CEO of Affirma Capital Managers (Singapore); and Mr. Johan Sven Richard Boden is currently General Director of DenEast Vietnam Limited.
The members of the Supervisory Board include: Ms. Nguyen Thi Thuy; Mr. Tieu Phuoc Thanh and Mr. Uday Krishna. Of which, Mr. Uday Krishna, an Indian national, is also the CEO of Afirma Capital (Singapore); and Ms. Nguyen Thi Thuy is currently the CEO of Holborn Capital Investment Fund.
Hoang Anh Son Duong
Source: https://www.congluan.vn/loc-troi-ltg-kinh-doanh-thua-lo-no-tien-nguoi-nong-dan-hdqt-bong-xuat-hien-nhieu-nhan-to-moi-post301421.html
Comment (0)