After many months of not being able to trade on margin, Hoa Sen Group reported a profit of hundreds of billions

On the afternoon of January 26, Hoa Sen Group Joint Stock Company (HOSE: HSG) announced its consolidated financial statements for the first quarter of the 2023-2024 fiscal year (from October 1, 2023 to December 31, 2023).

In the first quarter of the 2023-2024 fiscal year, HSG's consolidated revenue reached VND 9,073 billion, and consolidated profit after tax reached VND 103 billion. In the first quarter of the 2023-2024 fiscal year just announced, HSG recorded a recovery compared to the first quarter of the 2022-2023 fiscal year.

Specifically, although the economy has not fully recovered, HSG still recorded revenue of VND 9,703 billion, up 15% over the same period. In particular, HSG's gross profit margin has recovered strongly, from 2% in the first quarter of the 2022-2023 fiscal year to 11% in the first quarter of the 2023-2024 fiscal year, with gross profit reaching VND 960 billion, up 5 times over the same period.

Chart of gross profit (left, unit: billion VND) and gross profit margin (right) of HSG in 5 consecutive quarters. (Photo: D.V)

In addition to the strong recovery of gross profit margin, the sharp decrease in financial expenses is also a notable bright spot for HSG. Interest expenses and exchange rate differences have decreased sharply in the first quarter of the 2023-2024 fiscal year compared to the same period last year.

Specifically, interest expenses decreased by 47%, from VND48 billion to VND25 billion due to HSG's efforts in negotiating with banks to get the best interest rates for production and business activities.

Exchange rate difference costs decreased by 63%, from VND65 billion in the first quarter of the 2022-2023 fiscal year to VND24 billion in the first quarter of the 2023-2024 fiscal year. Exchange rate difference costs are recorded as losses due to exchange rate differences from import-export activities and settlement of outstanding USD loans.

Hoa Sen's interest expenses and exchange rate differences have decreased sharply. (Photo: D.V)

In the first quarter of the 2023-2024 fiscal year, HSG maintained no debt in USD, so even though the USD/VND exchange rate fluctuated, it did not heavily affect the exchange rate difference cost.

In the first quarter of the 2023-2024 fiscal year, HSG's financial revenue increased by 37% over the same period, from VND 32 billion to VND 44 billion, mainly due to exchange rate differences from the company's export activities. Export revenue in the first quarter of the 2023-2024 fiscal year accounted for 43% of total revenue and increased by 10% over the same period.

Thanks to the combination of the above factors, HSG's after-tax profit also improved positively from negative VND 680 billion in the first quarter of the 2022-2023 fiscal year to VND 103 billion in the first quarter of the 2023-2024 fiscal year.

Previously, Hoa Sen Group's shares were listed as ineligible for margin trading due to negative after-tax profits. However, the group's shares were later allowed to be traded on margin again.

Specifically, in May 2023, HSG shares were listed as ineligible for margin trading because the after-tax profit of the parent company's shareholders on the audited consolidated financial statements for the first 6 months of the 2022-2023 fiscal year was negative.

Specifically, according to the audited consolidated financial report for the first 6 months of the 2022-2023 fiscal year, HSG had revenue of nearly VND 14,900 billion, down nearly 50% over the same period and a net loss of VND 424 billion.

The reason for Hoa Sen's business losses is the "downhill" of the steel industry since the second half of 2022, with a sharp decrease in steel consumption and prices.

At the end of December 2023, Hoa Sen Group announced its consolidated financial statements for the 2022-2023 fiscal year from October 1, 2022 to September 30, 2023, audited by KPMG Vietnam.

The audited financial report shows that in the 2022-2023 fiscal year, HSG's consolidated revenue reached VND 31,650 billion, consolidated profit after tax reached VND 30 billion, an increase of VND 1.7 billion compared to the self-prepared consolidated financial report (VND 28.3 billion).

According to the current regulations guiding securities margin trading, if HSG's consolidated audited profit after tax is recorded as positive at VND 30 billion, HSG shares will be considered for margin trading again.

On December 27, 2023, the representative of Ho Chi Minh City Stock Exchange (HOSE) issued document No. 2049/TB-SGDHCM regarding the removal of HSG stock code of Hoa Sen Group from the list of securities ineligible for margin trading.

Thus, investors will be able to use margin (margin trading) provided by the securities company to buy back HSG stock code.

DAI VIET

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