Suffering heavy losses, Pomina Steel (POM) shares have just been transferred to control.

Pomina Steel (POM) shares have not escaped the warning status but have been transferred to the control status again.

On September 22, 2023, the stock code POM of Pomina Steel JSC was put on warning by HoSE due to the delay in submitting the reviewed semi-annual financial statements by 15 days beyond the prescribed deadline. Pomina explained that the company was collecting and providing assessments and negotiating with strategic investors, leading to the delay in submitting the financial statements.

Before POM could remedy this situation, it was recently transferred to the control area again. The reason is that POM was 30 days late in submitting its audited semi-annual financial statements for 2023, compared to the prescribed time.

After consecutive losses, Pomina Steel (POM) shares have just been transferred to control (Photo TL)

Thus, POM violated the provisions of Point g, Clause 1, Article 38 of the Regulations on listing and trading of listed securities issued together with Decision No. 17/QD-HDTV dated March 31, 2022 of the Board of Members of the Vietnam Stock Exchange.

The fact that stocks that have not yet escaped the warning status are transferred to normal control status will affect investor sentiment as well as stock prices in the short term.

Regarding the price movement of POM shares, in the last 10 trading sessions, this stock recorded 7 sessions of price decrease, including 1 session of floor price decrease. The stock price in 10 sessions decreased from 6,440 VND/share on September 22, 2023 to only 5,420 VND/share on October 5, 2023.

Losses for 5 consecutive quarters, Pomina Steel's losses swell again

In recent times, the situation of doing business below cost price due to high input material prices has caused Pomina Steel to continuously suffer losses. In 2022 alone, the company lost up to 1,079.9 billion VND.

In the first quarter of 2023, Pomina Steel achieved revenue of VND 1,645.1 billion. The loss after tax in the quarter decreased to VND 168.8 billion. In the second quarter of 2023, the company's revenue continued to decrease to VND 799.4 billion, high cost of goods sold caused the company to have a net loss from business activities of VND 35.2 billion.

Interest expense was recorded at VND227.2 billion while the company's financial revenue was only VND8.9 billion. After deducting all expenses, Pomina Steel's loss increased to negative VND350.2 billion.

Including the second quarter of 2023, Pomina Steel has now experienced its fifth consecutive quarter of losses. This trend has shown no signs of cooling down as the losses in the second quarter have ballooned again. The cause comes from the pressure of interest expenses while the company continues to operate below cost.

Equity is eroded, accumulated losses are increasing day by day

At the end of the second quarter, Pomina's total assets reached VND10,817.3 billion, down VND200 billion compared to the beginning of the year. Cash and cash equivalents dropped sharply from VND206.3 billion to only VND14.5 billion.

In addition, the company has 1,793.3 billion VND in short-term receivables, including 1,403.3 billion VND in short-term receivables from customers. Inventory has also decreased to only 995.6 billion VND.

One thing worth noting is that although the company's short-term debt has decreased, it still accounts for VND5,200.5 billion. Long-term debt in the second quarter increased from VND740.3 billion to VND1,066 billion. Thus, the total debt of Pomina Steel has reached VND6,266.5 billion, 3 times higher than the company's current equity.

Pomina Steel's equity at the end of the second quarter was only VND2,077.7 billion, down 20.4% compared to the beginning of the period. Of which, the owner's investment capital was recorded at VND2,796.8 billion. The company is also suffering a loss after tax of VND789.3 billion.

Source: https://www.congluan.vn/thua-lo-nang-co-phieu-cua-thep-pomina-pom-lai-vua-bi-chuyen-sang-dien-kiem-soat-post267392.html