Vinh Hoan Corporation (VHC) poured an additional 180 billion VND in capital into TNG Foods.
The Board of Directors of Vinh Hoan Corporation (VHC), a company famous for producing pangasius for export, has just decided to invest an additional VND180 billion in capital for its subsidiary, Thanh Ngoc Agricultural Products and Foodstuffs Company Limited - TNG Foods. After this capital contribution decision, VHC will increase its capital contribution to VND408 billion, equivalent to about 81.6% of charter capital.
In addition, the Board of Directors also approved Vinh Phuoc Food Company Limited to contribute an additional VND 134 million in capital to TNG Foods. The total number of shares that Vinh Phuoc Food is holding at TNG Foods after the transaction will be 8.4%, equivalent to VND 42 billion.
After a long slide in the first 5 months of the year, Vinh Hoan Corporation (VHC) still poured 180 billion into its subsidiary producing juice (Photo TL)
As of the end of the first quarter of 2023, Vinh Hoan owns 8 subsidiaries and 1 associated company, all of which are more or less related to Vinh Hoan's strong field of seafood. Meanwhile, TNG Foods has branched out in another direction with the field of producing juice from vegetables and fruits, processing and preserving vegetables and fruits.
Currently, Ms. Truong Thi Le Khanh, Chairwoman of VHC's Board of Directors, is the representative of VHC's capital contribution at TNG Foods.
VHC continues to slide with 5 consecutive months of negative growth due to declining export demand
Due to the decline in export demand in some key markets, Vinh Hoan continued to record negative growth for the fifth consecutive month.
According to Vinh Hoan's business results report, export revenue in May of a series of markets showed signs of decline, including: the US market decreased by 54%, to 373 billion VND; the Chinese market decreased by 30%, to 93 billion VND; the European market decreased by 27%, to 142 billion VND; and finally, the domestic market, Vietnam, also saw a 12% decrease in revenue, to only 224 billion VND.
In the previous April, Vinh Hoan's revenue also decreased by 47%, to only VND869 billion. This shows that the decrease in orders is not a temporary situation.
Q1 profit dropped 60%, Vinh Hoan is also investing in stocks and losing up to 84 billion VND
Also according to the Q1 2023 financial statements, Vinh Hoan recorded net revenue of only VND 2,222 billion, down about 32% compared to the same period last year. The decline in revenue caused selling expenses to simultaneously decrease to just over VND 50 billion.
On the other hand, business management costs increased to VND69 billion, equivalent to an increase of 17.5%. Financial costs, mostly interest expenses, also increased sharply from VND42 billion to VND90 billion. This means that businesses are having to increase debt in their capital structure.
Pressure from interest expenses has had a significant impact, causing the company's after-tax profit to be recorded at only VND226 billion, down 59% compared to the same period last year.
At the end of the first quarter of 2023, Vinh Hoan's total assets did not fluctuate much, remaining at VND 11,665 billion. Of which, short-term assets accounted for VND 7,714 billion, cash and cash equivalents recorded at VND 848 billion.
In the company's short-term asset structure, it is worth noting that VHC spent VND 179 billion on securities investment. By March 31, 2023, this investment was only worth VND 95 billion. Thus, at the end of March, Vinh Hoan's securities investment was temporarily recording a loss of up to 47%, equivalent to a temporary loss of VND 84 billion.
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