Pomina Steel (POM) stock price drops 45%, chairman's relatives sell off

Family members of Pomina Steel (POM) chairman continuously sell off stocks

Recently, Ms. Do Thi Kim Lang, sister of Mr. Do Duy Thai, Chairman of the Board of Directors of Pomina Steel JSC (Code: POM) registered to sell all 353,788 POM shares that she owns. This transaction will reduce Ms. Lang's ownership ratio from 0.13% to 0% of charter capital. The transaction will take place from December 4, 2023 to January 2, 2024.

This is not the only time Chairman Do Duy Thai's family has sold shares to divest from Pomina recently. Ms. Do Nhung, another sister of Mr. Thai, has also registered to sell all 6,571,727 POM shares to reduce her ownership from 2.35% to 0%. The registration period for trading is from November 15, 2023 to December 14, 2023.

Chairman of Pomina Steel Pom Lien Thoai Capital Stock Price Lao Doc 45 Image 1 — Family members of the chairman of Pomina Steel (POM) continuously divest capital, stock price drops 45% (Photo TL)

Ms. Do Thi Nguyet, Mr. Thai's sister, also registered to sell 3.4 million POM shares, reducing her ownership ratio from 1.64% to 0.39% of charter capital, the transaction will be carried out from November 15, 2023 to December 14, 2023.

Previously, in August, Mr. Thai's relatives also registered to sell shares. Ms. Do Thi Kim Cuc, Mr. Thai's sister, registered to sell 3 million shares, reducing her ownership ratio from 2.9% to 1.83%. On August 17, 2023, Ms. Do Thi Kim Ngoc, also Mr. Thai's sister, registered to sell 2.3 million POM shares, reducing her ownership ratio from 3.64% to 2.82%.

Due to the stock sell-offs by the chairman's family members and poor business results, POM stock price plummeted from VND8,450/share on July 18, 2023 to only VND4,600/share on November 30, 2023. Thus, POM stock price has lost 45.6% of its value in just 4 months.

Quarter 3 lost another 110 billion, continuously doing business below cost price

According to the latest Q3 financial statement, Pomina Steel achieved revenue of VND503.5 billion, down 83.1% compared to the same period last year. Cost of goods sold accounted for VND508.7 billion, causing the company to have a gross loss of VND5.2 billion.

Financial revenue decreased by 32.3% to VND11.3 billion. Financial expenses paid during the period decreased by half to VND58.9 billion. Sales expenses accounted for VND1.2 billion while business management expenses recorded a negative VND6.9 billion. POM results in a technical loss from core business activities of VND47.1 billion.

After deducting taxes and other expenses, Pomina Steel recorded a loss after tax of VND110.4 billion. Although it was lower than the same period last year, the loss of VND715.6 billion, this result still shows POM's gloomy business picture.

Accumulated revenue in the first 9 months of the year reached 2,948 billion VND, down 73.5% compared to the same period. Profit after tax recorded a negative 647.4 billion VND, down more than the loss of 707.5 billion VND in the same period. Compared to the set plan, POM has only completed 21% of the revenue plan and certainly cannot complete the profit plan due to the deep loss.

Negative business cash flow, long-term debt increased by one and a half times

In terms of asset structure, by the end of the third quarter of 2023, POM's total assets reached VND 10,688.9 billion, down 3.1% over the same period. The company's cash decreased sharply from VND 206.3 billion to only VND 14.3 billion. Equivalent to the amount of cash "evaporating" 93% in just the first 9 months of the year.

Long-term assets currently account for a large proportion, up to 7,343.8 billion VND. Of which, unfinished basic construction costs account for 5,796.9 billion VND.

POM's capital structure records that liabilities account for VND8,690.4 billion, equivalent to 81.3% of total capital. The company is borrowing short-term debt up to VND5,205.1 billion, long-term debt of VND1,146 billion. Of which, the amount of long-term debt tends to increase by 55% compared to the beginning of the year.

In addition, POM's cash flow in Q3/2023 recorded a negative net cash flow from operating activities of VND 253.2 billion, while it was still positive at VND 46.6 billion in the same period. Notably, the amount of money spent on interest payments amounted to VND 168.8 billion, showing a huge interest pressure on the company's cash flow.

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