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|Dam Ha Bac (DHB) continues to lost VND636 billion|
Ha Bac Nitrogenous Fertilizer & Chemicals Co., Ltd. (Dam Ha Bac – DHB)in the fourth quarter of 2019 recorded the net revenue of VND768 billion ($33.39 million), decreased 11 per cent compared to the same period a year before.
Meanwhile, the cost of sales increased by 5.1 per cent up to VND698 billion ($30.35 million), taking the gross profit to only VND70.3 billion ($3 million), a 65 per cent slump on-year.
The financial revenue in the quarter also reduced VND12 billion ($521,740) to only VND9.3 billion ($404,350) with the financial costs climbing up to VND243 billion ($10.57 million), up VND32 billion ($1.39 million) which most of it is interest from the loan.
The financial report of DHB also showed total liabilities as of the end of 2019 added up to VND393 billion ($17.1 million) compared to the beginning of the same year. Of this, short-term loans increased more VND55 billion ($2.39 million) to VND1.2 trillion ($52,174). The total short term and long term loan is up to VND7.5 trillion ($326.1 million).
Therefore, DHB noted the net loss of VND219.3 billion ($9.5 million) from the business activity, VND42 billion ($1.8 million) more than the last quarter of 2018. The after-tax profit was more than negative VND217 billion ($9.43 million), the largest loss over the years.
For the whole year of 2019, DHB's net revenue reached VND2.9 trillion ($126.1 million), down 9.7 per cent against the same period of 2018. Notable, the total financial costs in the year reached VND867 billion ($37.7 million).
In addition, the cost of sales climbed sharply, marking a record loss of VND636 billion ($27.65 million), twice as high as the VND313 billion ($13.6 million) in 2018.
The total consolidated loss by the end of 2019 went up to VND3.28 trillion ($142.6 million), with the negative equity of more than VND516 billion ($22.43 million). The stock-in-trade as the end of 2019 is VND500 billion ($21.74 million), doubling since the beginning of the year.
The “financial health” of DHB, one of the twelve losing industrial projects under the management of the Ministry of Industry and Trade,requires urgent attention as business performance keeps slipping, with mounting losses and negative equity.
There are many reasons behind the growing losses. Specifically, according to DHB management, the price of products in the first half of 2019 decreased significantly compared to the same period in 2018, excluding the increasing input costs due to the increasing price of coal dust and electricity prices.
In addition, DHB is facing difficulties due to high financial costs, especially from January 2019 as the company is not allowed to extend the repayment period as well as unable to balance the finance to pay off the principal for Vietnam Development Bank (VDB). Therefore, the current interest of overdue penalty is 18 per cent on the overdue principal.
The project to improve and expand DHB was officially put into commercial operation in December 2015. Adding to the continuous losses, in the process of operation, the plant equipment system has many incidents, and the entire system had to be shut down, delaying the timeline and racking up operating costs.