"Shrimp King" Minh Phu makes big profits thanks to dividends from subsidiaries

Minh Phu's after-tax profit in the third quarter of 2024 reached more than VND 198 billion, the highest in the past 7 quarters thanks to dividends received from subsidiaries.

Minh Phu Seafood Corporation (stock code MPC) has just announced its separate financial report for the third quarter of 2024 with net revenue of VND 2,700 billion, up 35% (equivalent to VND 700 billion) over the same period. After deducting the cost of goods sold, the company's gross profit was VND 202 billion, up 9% over the same period last year. The gross profit margin reached 7.5%, down nearly 2 percentage points over the same period.

Financial, sales and administrative expenses all increased sharply compared to the same period last year. Specifically, financial expenses increased by 48% to VND147 billion, sales expenses increased by 74% to VND151 billion and administrative expenses increased by 5% to VND26.5 billion.

Financial revenue increased sharply to VND319 billion, while in the same period it only reached over VND10 billion. This amount mainly came from dividends received from subsidiaries, including VND270 billion from Minh Phu Hau Giang Seafood and VND27 billion from Minh Phu Seafood Supply Chain. This is the main reason why the company's after-tax profit reached over VND198 billion, the highest level in the past 7 quarters, while in the same period it lost VND13.3 billion.

In the first 9 months, Minh Phu achieved net revenue of VND6,207 billion, up 33% over the same period last year. Gross profit during this period was over VND483 billion, gross profit margin was nearly 8%. After deducting expenses, the company reported a profit after tax of VND135 billion, 19 times higher than the same period.

At the 2024 annual meeting, Minh Phu set a target of 70,000 tons of production this year, bringing in VND18,569 billion in revenue. In addition, after-tax profit is estimated at VND1,266 billion. This is the third time in the past 5 years that the company has set a pre-tax profit target of over a thousand billion.

According to the company's management, the target of a trillion-dollar profit in 2024 faces many challenges from economic fluctuations . Specifically, the company recognizes that high inflation may continue to reduce demand for seafood consumption and increase prices of farming and processing materials. The company chooses a strategy of product diversification, focusing on deep processing to create value-added products and maintain the quality of input materials to face this challenge.

The second issue mentioned by Minh Phu’s management is the crisis in energy prices and transportation costs. Accordingly, the company said it will monitor the market and adjust its business plan flexibly, promoting expansion to Asian countries to reduce transportation costs and find niche markets as well as increase its ability to serve the domestic market. Specifically, the company said it will soon strongly exploit the domestic market again with the goal of increasing the total proportion of domestic revenue from the current 1% to 5-10%.

As of the end of the third quarter of 2024, Minh Phu's parent company's total assets were approximately VND8,159 billion, an increase of VND588 billion compared to the beginning of the year. The company had approximately VND2,638 billion in liabilities, most of which were short-term items. Owner's equity increased slightly compared to the beginning of the period, reaching VND5,521 billion. Undistributed profit after tax was more than VND1,242 billion.

On the stock exchange, MPC shares are currently at VND16,300. This code has lost 14% compared to the highest price of the year recorded in June 2024 (VND18,900). With about 400 million shares outstanding on the UPCoM exchange, the company's market capitalization is more than VND6,535 billion.

Source: https://baodautu.vn/vua-tom-minh-phu-lai-dam-nho-co-tuc-cong-ty-con-d228264.html