After many changes, Becamex (BCM) still mobilizes an additional 2,000 billion VND in bonds.
In 2022, Becamex Industrial Development and Investment Corporation (HoSE: BCM) approved a plan to issue bonds worth VND2,000 billion. However, this plan has been postponed due to many unfavorable information about the corporate bond market.
As of June 2, 2023, Becamex has approved the issuance of individual bonds with a total face value of VND 1,000 billion, expected to mature in 2025. The bonds are issued in the form of non-convertible, secured bonds. The amount raised is expected to be used to pay the principal and interest of the company's maturing bond debts.
Bearing 2.6 billion in interest costs every day, Becamex IDC (BCM) still mobilizes an additional 2,000 billion VND in bonds (Photo TL)
However, on June 26, 2023, Becamex canceled this issuance plan.
On September 25, 2023, Becamex announced the successful issuance of VND 2,000 billion in bonds with code BCMH2328001, 5-year term, issuance date July 6, 2023, maturity July 5, 2028.
Q2 profit drops 97%, daily interest expense is nearly 2.5 billion VND
Becamex IDC's business results in the first half of 2023 were relatively bleak. In the first quarter, revenue was only VND 791 billion, down 44.8%, and after-tax profit was VND 74 billion, down 81% over the same period.
In the second quarter, Becamex's revenue reached VND1,286 billion, down 33.2% year-on-year. Cost of goods sold accounted for VND558.9 billion, gross profit reached VND727.1 billion, gross profit margin increased from 49.6% to 56.5%.
However, financial revenue during the period dropped sharply from VND69 billion to VND10.3 billion. Interest expense increased from VND220.5 billion to VND269 billion, equivalent to an increase of 22%.
Revenue decreased but business management costs and sales costs did not decrease but increased, accounting for VND252.1 billion and VND124.4 billion respectively. Profit after tax in the second quarter was only VND31.6 billion, down 97% compared to the same period.
Cumulative revenue in the first 6 months of the year of Becamex reached 2,077.4 billion VND, profit after tax was 58.8 billion VND, down only 1/3 compared to the same period. Notably, interest expense in the first 6 months of the year accounted for 460.3 billion VND, equivalent to Becamex having to pay 2.6 billion VND in interest every day.
Debt continues to increase, cash flow negative 1,100 billion VND
At the end of the second quarter, Becamex's total assets reached VND48,811.5 billion. Cash and cash equivalents decreased by 62% compared to the beginning of the year. Deposits also decreased from VND435.5 billion to only VND335.3 billion.
In Becamex's asset structure, receivables account for VND5,439.4 billion. Inventories currently account for VND21,600.8 billion. In addition, the company also recorded VND15,949.3 billion in assets invested in subsidiaries. Dividends distributed from these investments in the second quarter have decreased sharply.
In Becamex's capital structure, Becamex's short-term financial debt has increased by more than VND1,300 billion in just the first 6 months of the year, to VND6,264 billion. Long-term debt currently accounts for VND9,718.5 billion. Thus, Becamex's total debt is currently about VND15,982.5 billion.
Becamex's equity is only VND 17,936.7 billion, undistributed profit after tax accounts for VND 4,795.6 billion. It can be seen that Becamex's debt is almost as high as its equity, causing risks in capital management.
Also on Becamex's cash flow statement, in just the first 6 months of 2023, Becamex IDC's cash flow from operating activities was negative by VND 1,110.2 billion. Of which, the company spent up to VND 895.2 billion to pay interest. This cash spent on interest has caused Becamex's cash flow to be relatively negative. This debt pressure may continue to increase when Becamex raises an additional VND 2,000 billion from the bond channel.
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