Profit decreased by 39%, Siba Group (SBG) had to sell 11.5 million shares to pay off debt

Siba Group (SBG) must issue shares to pay off debt

Siba High-Tech Mechanical Group Corporation - Siba Group (Code: SBG) has just announced the certificate of the State Securities Commission allowing the company to offer shares to the public.

Specifically, Siba Group plans to offer 11.5 million shares to the public within 90 days of being approved by the State Securities Commission. According to the initial plan, shares will be offered to existing shareholders at a rate of 46%. Equivalently, each shareholder owning 100 shares will have the right to buy 46 new shares.

Siba Group (SBG) recorded a sharp decline in profits and revenue. The company had to issue 11.5 million shares to raise money to pay off debts. (Photo TL)

The newly issued shares have a par value of VND10,000/share. On the market, SBG shares are currently valued at VND15,650. Thus, the offering price of the newly issued shares is 36% lower than the market price.

The expected proceeds from the issuance are approximately VND115 billion. The entire amount will be used to pay off the company's debt for goods due.

Revenue down 18%, profit after tax down 39%

Regarding business activities, in the first 6 months of 2024, Siba Group's sales and service revenue was recorded at VND 1,877.4 billion, down 18%. Of which, cost of goods sold accounted for VND 1,835 billion, gross profit was VND 42.4 billion, down 13.3%.

During the period, financial revenue was recorded at VND379 million, down half compared to the previous year. Meanwhile, financial expenses accounted for VND9.7 billion. Although interest expenses have decreased, they still account for VND6.9 billion.

Both selling expenses and administrative expenses increased in the first half of the year. Administrative expenses accounted for VND13.5 billion and selling expenses accounted for VND6.7 billion. After deducting all expenses and taxes, Siba Group's after-tax profit was only VND11.2 billion, down 39%.

In 2024, SBG targets revenue of VND3,800 billion and after-tax profit of VND40 billion. Thus, in the first half of the year, the company has only completed 49% of the revenue plan and 28% of the annual profit plan.

Equity is overwhelmed by liabilities

Siba Group's plan to issue shares to raise money to pay off due debts will significantly affect the company's asset structure and capital sources.

Specifically, total assets as of the end of the second quarter of 2024 reached VND 1,486.7 billion, most of which were short-term assets, accounting for VND 1,233 billion. Cash and cash equivalents accounted for VND 59.6 billion, an increase of VND 16 billion compared to the beginning of the year.

Notably, most of Siba Group's assets are in the form of short-term receivables, accounting for VND817.9 billion. Of which, short-term receivables from customers account for VND635.5 billion. Compared to the beginning of the year, the amount of short-term receivables from customers has increased by one and a half times, showing that the company is having problems collecting money from customers.

In addition, other short-term receivables are accounting for VND103 billion, an increase of more than VND19 billion compared to the beginning of the year. Inventories also increased significantly by 29.1% to VND315 billion. Long-term assets, mainly fixed assets, factories and machinery, currently account for VND253.7 billion, equivalent to only 17% of total assets.

Regarding capital structure, liabilities are overwhelming equity, accounting for VND 1,057.3 billion, equivalent to 71%. Of which, the company is recording short-term payables to suppliers of up to VND 733 billion.

Short-term debt increased by nearly 40 billion VND compared to the beginning of the year, accounting for 106.2 billion VND. Long-term debt also increased by 42 billion VND, accounting for 104.7 billion VND.

Owner's equity only accounted for 429 billion VND, completely overwhelmed by the amount of debt payable. Of which, undistributed profit after tax accounted for 99.6 billion VND, a slight increase compared to the accumulated profit at the beginning of the year.

Source: https://www.congluan.vn/loi-nhuan-giam-39-siba-group-sbg-phai-ban-115-trieu-co-phieu-lay-tien-thanh-toan-cong-no-post310858.html