SMC earned more than 300 billion VND after selling all 13.1 million NKG shares

Taking advantage of the stock's 76.5% increase from the bottom, shareholders related to the leadership sold all 13.1 million shares of Nam Kim Steel JSC (code NKG), reducing ownership to 0% of charter capital.

From February 5 to March 4, SMC Investment and Trading JSC (code SMC - HoSE floor) sold all 13.1 million NKG shares, reducing ownership from 4.98% to 0% of charter capital and officially no longer owns NKG shares.

In addition, from February 5 to March 4, NKG shares traded on the market from 23,500 to 24,500 VND/share.

Thus, it is estimated that SMC Investment and Trading Company has sold all 13.1 million NKG shares, earning about 307.85 billion VND to 320.95 billion VND.

It is known that Ms. Nguyen Ngoc Y Nhi is a member of the Board of Directors of SMC Trade Investment and also a member of the Board of Directors of Nam Kim Steel.

In the context of shareholders related to the leadership selling, from April 24, 2023 to March 4, 2024, NKG shares increased by 76.5%, from VND 13,850 to VND 24,450/share.

Also related to asset sales, at the end of 2023, SMC Investment and Trading Company approved the transfer of land use rights, equipment, and architecture on land at SMC Binh Duong - Dong An Industrial Park, Thuan An District, Binh Duong Province with an area of 6,197 m2, with an expected sale value of 49 billion VND.

Previously, SMC Investment and Trading Company had just passed a Resolution to maintain the Company's operations. Accordingly, the Company's Board of Directors unanimously approved the policy of reducing production and business activities, personnel in the entire system, and reducing all arising costs.

In which, the General Director is assigned the responsibility to direct relevant departments and member companies to implement the plan to reduce production and business activities and cut staff.

It can be seen that selling assets can be considered a specific action after the policy of narrowing down production and business activities and reducing costs.

SMC Trade Investment records additional loss of VND 879.3 billion in 2023

In terms of business activities, in the fourth quarter of 2023, SMC Investment and Trading Company recorded revenue of VND 3,212.26 billion, down 23.6% over the same period, and profit after tax of parent company shareholders recorded a loss of VND 329.87 billion (same period, loss of VND 514.99 billion).

During the period, the Company no longer operated below cost price when gross profit was recorded at positive VND 48.8 billion compared to negative VND 367.9 billion in the same period, an increase of VND 416.7 billion. In addition, financial revenue increased by 26.1%, equivalent to an increase of VND 6.23 billion, to VND 30.1 billion; financial expenses decreased by 22.8%, equivalent to a decrease of VND 23.17 billion, to VND 78.6 billion; sales and business management expenses increased by 290.8%, equivalent to an increase of VND 264.83 billion, to VND 355.9 billion; other profits increased by 11.03 times, equivalent to an increase of VND 27.13 billion, to VND 29.59 billion; and other activities fluctuated insignificantly.

In terms of core business activities (gross profit - financial expenses - sales & administrative expenses), in the fourth quarter of 2023, the Company continued to record a loss of VND 385.7 billion compared to the same period last year with a loss of VND 560.7 billion.

Thus, in the last quarter of 2023, although gross profit returned to positive, because the gross profit generated was not enough to cover financial costs, sales and business management costs, SMC Investment and Trading Company continued to record a loss during the period.

Explaining the business losses, SMC Investment and Trading Company said that the freezing of the real estate market caused real estate businesses in general and construction and installation businesses to face prolonged difficulties, a sharp decline in revenue and cash flow, thereby leading to the Company's slow-moving debt to large customers. By the end of 2023, the Company had to increase provisions for receivables, making profits ineffective.

Accumulated in 2023, SMC Investment and Trading Company recorded revenue of VND 13,786.3 billion, down 40.5% over the same period, the parent company's after-tax profit recorded a loss of VND 879.3 billion compared to the same period of VND 578.99 billion, an increase of more than VND 300 billion in loss.

It is known that in 2023, SMC Investment and Trading Company plans to do business with revenue of VND 20,350 billion, down 12.2% over the same period and expected after-tax profit of VND 150 billion compared to the same period with a loss of VND 651.8 billion. Thus, at the end of 2023, SMC Investment and Trading Company recorded a much larger loss than the plan to make a profit in the fiscal year.

Entering 2024, SMC Investment and Trading Company approved a plan to sell 900,000 tons of various types of steel and expected after-tax profit of 80 billion VND.

In addition, with continued losses for the second consecutive year, as of December 31, 2023, the total accumulated loss has reached VND 162.9 billion (accumulated profit at the beginning of the year was VND 343.6 billion) and equal to 22.1% of equity.

Current liabilities are greater than current assets.

In terms of capital scale, as of December 31, 2023, the total assets of SMC Investment and Trading Company decreased by 26.9% compared to the beginning of the year, equivalent to a decrease of VND 2,236.6 billion, to VND 6,092.5 billion. Of which, the main assets were short-term receivables recorded at VND 1,561.3 billion, accounting for 25.6% of total assets; fixed assets recorded at VND 1,451.5 billion, accounting for 23.8% of total assets; cash and short-term financial investments recorded at VND 1,152.9 billion, accounting for 18.9% of total assets; inventories recorded at VND 840.3 billion, accounting for 13.8% of total assets and other items.

During the period, assets fluctuated strongly, mainly cash and short-term financial investments decreased by 23.2% compared to the beginning of the year, equivalent to a decrease of 347.7 billion VND, to 1,152.9 billion VND; short-term receivables decreased by 46.7%, equivalent to a decrease of 1,370.6 billion VND, to 1,561.3 billion VND; inventories decreased by 46.3%, equivalent to a decrease of 724.5 billion VND, to 840.3 billion VND...

Notably, at the end of 2023, SMC Investment and Trading Company had set aside a provision for short-term doubtful receivables of up to VND 553.3 billion (at the beginning of the year, it only set aside VND 50.3 billion). In particular, the bad debt list includes a series of reputable real estate and construction companies in Vietnam.

Regarding capital sources, by the end of 2023, total short-term and long-term debt decreased by 15.7% compared to the beginning of the year, equivalent to a decrease of VND 561.2 billion, to VND 3,014.3 billion and equal to 375% of equity (at the beginning of the year, total debt was VND 3,575.5 billion, equal to 207.5% of equity) - although the value of total debt decreased, the ratio to equity increased because the rate of debt reduction was lower than the rate of equity reduction.

In addition, also at December 31, 2023, SMC Investment and Trading Company's short-term debt was VND 4,715.7 billion, short-term assets were VND 3,896.6 billion. Thus, short-term debt was VND 819.1 billion larger than short-term assets.

It can be seen that SMC Investment and Trading Company is using 819.1 billion VND of short-term capital under 1 year to finance long-term assets with a term of over 1 year.

Source