Hung Vuong Corporation reports loss of $12 million in second quarter

Hung Vuong Corporation is getting farther away from its annual targets

Revenue from sales and services in the second quarter was VND2.58 trillion ($113.66 million), down 55 per cent on-year. Gross profit from sales and services was VND116 billion ($5.1 million), equivalent to the same period.

Meanwhile, financial revenue was negative VND73.7 billion ($3.25 million) due to liquidating investment in subsidiaries. As a result, Hung Vuong lost over VND272 billion ($12 million), doubling its losses from the same period last year.

Consolidated gross revenue in the financial year’s first half (between October 1, 2017 and March 31, 2018) was VND5.812 trillion ($256 million), down 40 per cent on-year.

Revenue from the feed segment decreased by 15 per cent to VND1.473 trillion ($65 million), materials for animal feed processing reduced by VND1 trillion ($44 million) to approximately VND332 billion ($14.6 million), seafood declined by VND1.267 trillion ($55.8 million) to nearly VND768 billion ($33.8 million), while revenue of real estate increased to VND354 billion ($15.6 million).

Thanks to the VND7 billion ($308,370) first quarter profit, accumulated losses of the fiscal year’s first half were VND264.7 billion ($11.66 million). Up to date, the total accumulated losses of Hung Vuong are VND749 billion ($33 million).

With these bad business results, it is very hard for the "King of Pangasius" Hung Vuong to reach the VND800 billion ($35.2 million) profit target. Moreover, Hung Vuong is one of the companies most affected by the decision of the Department of Commerce (DoC) this year to apply export tax between $2.39 and $7.74 per kilogramme on pangasius.

In a document sent to the State Securities Commission to outline its plans to overcome the accumulated losses in 2018, Hung Vuong revealed plans of entirely divesting from subsidiaries like Sao Ta Foods JSC (FIMEX VN), and selling half of Viet Thang Feed JSC (code: VTF), including 24 per cent already sold to VinEco in last March.

This company will liquidate land plots at 765 Hong Bang and 94 Pham Dinh Ho in Ho Chi Minh City, as well as close some ineffective seafood processing factories due to a lack of materials.

On the Ho Chi Minh City Stock Exchange (HSX), the price of HVG’s share is as cheap as a cup of tea at VND2.980, and Hung Vuong's capitalisation has been reduced to VND690.5 billion ($30.4 million). HVG’s share has been under supervision by HSX.