Tien Len Steel (TLH) suffered stock losses, 9-month profit decreased by 86.5%

Tien Len Steel (TLH) 9-month profit drops 86.5%

According to the business results report for the third quarter of 2023, Tien Len Steel (TLH) recorded net revenue of VND 1,324.5 billion, up 14.2% over the same period. Although revenue increased, cost of goods sold also increased, causing gross profit to only reach VND 35.8 billion, down 36.9%. Gross profit margin decreased from 4.9% to only 2.7%.

Financial revenue during the period increased nearly 3 times, to 12.9 billion VND. However, financial expenses still accounted for 27.4 billion VND, and interest expenses were not reduced much, accounting for 24.6 billion VND.

steel tien len tlh lose stock market profit 9 months down 865 picture 1 — Tien Len Steel (TLH) profit in the first 9 months of the year plummeted, still had to bear losses in securities trading (Photo TL)

Tien Len Steel’s total selling and administrative expenses in the third quarter were VND20.8 billion, down slightly from the same period last year. The company also recorded a sharp increase in other income of VND5.9 billion. This was the source of income from the liquidation of fixed assets in the third quarter.

After deducting all expenses and taxes, Tien Len Steel recorded a profit after tax of VND5.2 billion, down 23.5% over the same period last year.

By the end of the third quarter of 2023, TLH's total accumulated revenue reached VND 3,988.9 billion, up 8.9% over the same period. Accumulated profit after tax reached VND 16.5 billion, down 86.5%.

Compared with the 2023 plan with revenue of VND 5,000 billion and profit after tax of VND 100 billion, Tien Len Steel has only completed nearly 80% of the revenue plan and 16.5% of the annual profit plan.

Profits plummet, TLH is still having to "bear losses" in securities

At the end of the third quarter, Tien Len Steel's total assets reached VND3,973.7 billion, a slight decrease compared to the beginning of the year. Cash and cash equivalents decreased by nearly half to only VND63.4 billion.

In addition, Tien Len Steel has 115.5 billion VND in short-term financial investments, including 88.2 billion VND in trading securities. Currently, Tien Len Steel is having to make a provision for a decrease in the value of trading securities of 13.5 billion VND. This means that the securities investment is temporarily recording a loss of 13.5 billion.

The amount of receivables in the period also tended to increase sharply, up to 437.6 billion VND. Notably, TLH is also having to record a provision for short-term doubtful receivables of 181.1 billion VND.

The company's inventories account for VND2,760 billion, equivalent to nearly 70% of total assets. Provisions for inventory depreciation also account for VND4.9 billion.

Regarding Tien Len Steel's capital structure, the majority of capital comes from payables with VND 2,100.4 billion. Of which, short-term loans and financial leasing debts account for VND 1,271.2 billion, long-term debts account for only VND 4.3 billion. The scale of TLH's loans is tending to decrease compared to the beginning of the year.

Owner's equity at the end of the third quarter reached VND1,873.3 billion, with owner's equity accounting for VND1,123.2 billion. In addition, the company has VND573.2 billion in undistributed profit after tax.

Source