Continuing to sell assets, SMC transfers another 2.7-hectare land plot in Da Nang

The land plot of nearly 2.8 hectares is expected to be transferred for VND96 billion. In less than a year, SMC has sold assets four times, helping to generate cash flow from investment activities (CFI).

SMC continues to sell assets.

The Board of Directors of SMC Investment and Trading Joint Stock Company (code SMC, HoSE floor) unanimously approved the transfer of land use and assets attached to land at SMC Da Nang One Member Co., Ltd., located in Cam Le district, Da Nang city, area of 27,731 m2, land use purpose is industrial park land.

Accordingly, SMC Commercial Investment plans to transfer the above land for more than 96 billion VND.

Owning assets with an expected transfer value of hundreds of billions of VND, but the financial situation of SMC Da Nang Company Limited is not very bright.

The company has a charter capital of 50 billion VND, 100% owned by SMC, with its main activities in the field of Coil center, specializing in providing and processing slitting and cutting steel plates with high precision according to customers' specific requirements with a total designed capacity of 100,000 tons/year. According to the 2024 semi-annual financial report (parent company), after setting aside a provision of nearly 42.7 billion VND, the fair value of the remaining investment in SMC Da Nang is only over 7.3 billion VND, reflecting the accumulated loss that has eroded the parent company's capital contribution.

Not only this deal, SMC has been continuously selling assets since November 2023. There have been a total of 3 previous sales. Specifically, in mid-November 2023, the 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. Immediately before approving this transfer, the Board of Directors unanimously approved the policy of narrowing down production and business activities and personnel in the entire system, reducing all arising costs.

By January 2024, the company approved the transfer of land use rights and assets attached to the land at SMC Tan Tao 2 - Tan Tao Industrial Park with an area of 9,096 m2, located at Lot 62-64, Road 3, Tan Tao Industrial Park , Tan Tao A Ward, Binh Tan District, Ho Chi Minh City. The expected transfer price is 126 billion VND. In April 2024, the company approved the transfer of the office building at 681 Dien Bien Phu (Binh Thanh, Ho Chi Minh City) with an area of 329.5 m2, the transfer price is 170 billion VND.

SMC's continuous asset sales come amid many business difficulties. In the first half of 2024, the company recorded revenue of VND 4,471 billion, down 39.9% year-on-year, with after-tax profit of VND 89 billion compared to a loss of VND 385.91 billion due to asset sales in the same period. It is known that in 2024, the company plans to have revenue of VND 13,500 billion, and make a profit of VND 80 billion again.

In the second quarter of 2024 alone, the company recorded net revenue of VND2,240 billion, down 42% year-on-year, with a gross loss of VND67 billion. Despite earning nearly VND100 billion from the sale of its headquarters at 681 Dien Bien Phu, Ward 25, Binh Thanh District, the company still reported a net loss of VND107 billion. This is the 6th quarter of loss in the past 8 quarters.

Cash flow from investment activities in the first half of 2024 is VND 541 billion. This is the main cash inflow segment, in the context of cash flow from business activities and financial activities both in deficit, negative VND 413 billion and negative VND 512 billion, respectively.

As of June 30, 2024, the company had VND3,300 billion in short-term assets, of which cash and short-term financial investments were VND775 billion. Accounts receivable were nearly VND1,466 billion, down nearly VND200 billion compared to the beginning of the year. Regarding bad debt settlement, at the 2024 General Meeting of Shareholders, Ms. Nguyen Ngoc Y Nhi, Vice Chairman of the Company's Board of Directors, said that if the debt could not be settled, the company would have to set aside an additional VND90 billion in provisions in the second quarter, bringing the total provision to nearly VND300 billion for the whole year of 2024.

“SMC must definitely deal with debt this year. The solutions include cash collection, stock swaps, receiving assets to offset debt, and if the debt settlement plan is feasible, SMC will accept it,” Ms. Nhi emphasized. Bad debt as of June 30, 2024 recorded a total value of VND1,310 billion, of which only VND731 billion is recoverable. Thanks to the sale of assets, as of June 30, 2024, the company has reduced its accumulated loss to VND68 billion.

By the end of the second quarter, inventories were at VND801 billion, down from VND54 billion at the beginning of the year. Short-term debt was more than VND4,000 billion, of which short-term loans and financial leases were VND2,250 billion. On the stock market, SMC shares are trading at VND8,100/share, down 21% from the end of last year and down 60% from the peak of 2024 in July 2024.

Source: https://baodautu.vn/tiep-tuc-ban-tai-san-smc-chuyen-nhuong-them-khu-dat-27-ha-tai-da-nang-d225735.html