Hoang Anh Gia Lai reports $49 million loss in first half

According to a recently publicised report, HAG, which operates in multiple sectors, such as agriculture, power generation, and mining, earned a revenue of VND3.66 trillion ($164 million) in the period. Due to the unusual loss of VND941 billion ($42.2 million) and financial costs reaching VND782 billion ($35 million), the company reported a pre-tax loss of VND1.075 trillion ($48.2 million).

Chairman Doan Nguyen Duc of HAG consistently ranked among the top five richest people in Vietnam’s stock exchanges from when HAG was listed in 2008 to last year. A HAG stock once reached the highest price of VND55,000 ($2.47). Now the price of a HAG stock has decreased by a whopping 89 per cent, reaching VND6,300 (28 UScent) at the close of the trading session on August 23.

HAG’s report said that the primary causes of loss are the sale of a real estate project in Ho Chi Minh City, which prompted the company to book a loss of VND413 billion ($18.5 million), a total impairment loss from other inefficient assets of VND530 billion ($23.76 million), and the interest on its borrowings.

The company’s husbandry operation counted 7,500 milk cows. The meat cow operation, which was the main contributor to the revenue and profit of the company in the period, now has 130,000 cows. Harvest was finished on the sugar plantations in March 2016, producing altogether 47,000 tonnes, because of a change in cultivation timeline brought down the yield compared to previous years. HAG said the yield is going to improve in the next years.

HAG said it had finished building its palm oil processing plant in Cambodia, with a capacity of 45 tonnes of fruit per hour. The company plans to officially start the plant in the fourth quarter of this year.

Regarding its real estate operations, HAG’s office tower in Myanmar is 60 per cent rented, while the connected mall is 95 per cent filled. The 5-star hotel officially started operation in August.

In the first six months, in Vietnam, the company got rid of some extra weight by disposing of some real estate and mining projects and operations where it sees no prospect. The unusual expenses from selling these project reached a cumulative VND944 billion ($42.3 million), accounting for 2 per cent of the company’s total assets. Meanwhile, HAG’s hotels and hospitals are making profit.

HAG’s streak of bad luck started at the beginning of the year, when the company reported a loss of VND589 billion ($26.4 million) in the fourth quarter of 2015, a first-time loss since the company was listed in 2008. The company’s debt problem subsequently came under scrutiny. HAG’s financial statement showed that as of December 31, 2015, the company held VND32.9 trillion ($1.47 billion) in liabilities, which is twice the owners’ equity.

On May 17, the State Bank of Vietnam (SBV) gave approval to Hoang Anh Gia Lai’s creditors to bail out the debt-ridden company.

In late May the central highlands province of Kon Tum withdrew its previous approval for a VND1.6 trillion cattle project run by HAG in Ia H'Drai district. HAG’s chairman at the point said the company had not done any work on the project and had no plans to develop it either, but did not go into explanations.

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