Pomina 2 Steel Plant - Photo: POM
"The company is making efforts to find investors to restructure and the factories can resume production as soon as possible," Pomina Steel's board of directors shared in an official dispatch explaining the loss results in the recently announced consolidated financial report for the fourth quarter of 2024.
Regarding the reason for the delay in submitting the 4th quarter 2024 report, the board of directors of Pomina Steel Joint Stock Company said that one of the factories had a server system problem in the 3rd quarter, leading to a delay in data collection.
Pomina Steel used to be the leading steel brand in Vietnam with the famous slogan "The core of life" and was known as the leading enterprise in the industry in the early 2010s.
With its main product being construction steel, the company focuses on exploiting the key market in the South. Owning three factories (Pomina 1, 2, 3) with a total capacity of more than 1.5 million tons of steel/year, Pomina used to be a symbol of the domestic steel industry.
However, from the third quarter of 2012, Pomina Steel's production and business activities began to decline. The company has been continuously losing money since the second quarter of 2022, lasting for 11 consecutive quarters.
According to the recently released consolidated report, Pomina Steel suffered a net loss of nearly VND200 billion in the fourth quarter of 2024, bringing the total loss for the year to more than VND991 billion.
Revenue last quarter reached more than 751 billion VND, up 2.2 times over the same period in 2023, mainly due to increased domestic steel consumption.
However, cost of goods sold accounts for nearly 99% of net revenue, causing gross profit to be less than 10 billion VND.
Net loss from business operations (VND65 billion) and loss from other operations (VND134.5 billion) continued to drag the company's business results down further.
Pomina Steel’s management explained that the loss situation stemmed from many factors such as the Pomina 1 and Pomina 3 factories still ceasing operations to reduce costs, reduce labor, save electricity, water and materials. However, the company still had to bear large loan interest, which heavily affected business results.
This enterprise has total liabilities by the end of 2024 of VND 9,640 billion, nearly equal to total assets (VND 9,903 billion).
Pomina Steel's short-term debt is more than VND5,400 billion, of which VietinBank Ho Chi Minh City branch is the largest creditor (VND2,620 billion), followed by BIDV Ho Chi Minh City branch (VND1,680 billion) and Dai Quang Minh (VND300 billion).
In addition, the company also has a long-term debt of nearly VND 719 billion, mainly from a loan of more than VND 680 billion for the blast furnace project in Ba Ria - Vung Tau (signed with VietinBank in 2017).
To escape the difficulties, in addition to restructuring, Pomina Steel is hoping for support from investors. In August 2024, the company announced that it had signed a strategic cooperation agreement with Nansei Steel Company (Japan).
In addition, the company also signed a memorandum of understanding with a major investor (identity not disclosed) to restart the blast furnace project, anticipating the need for public investment and real estate projects expected to recover strongly from this year.
Pomina Steel is a subsidiary of Viet Steel Trading and Production Company Limited, founded by Mr. Do Duy Thai and currently holds the position of chairman.
Mr. Thai is the brother of Mr. Do Tien Si, who is holding the position of general director at Pomina, a company with only 666 employees, a decrease of more than 12% compared to the end of 2023.
POM shares were delisted from HoSE from May 2024 due to late submission of audited financial statements for three consecutive years (after 11 years of listing). POM is currently trading on UPCoM, with a market price of VND2,100/share.
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