Despite being backed by Japanese steel producer Kyoei Steel, Vietnam Italy Steel (VIS) has recorded a loss of VND326 billion ($14.2 million) in 2018.
|Even with the backing from Kyoei, VIS reported a record loss |
VIS has published its financial statement for the fourth quarter of 2018. Accordingly, the company had to suffer a loss of VND195.6 billion ($8.5 million), bringing its accumulated loss for the whole year to VND326 billion ($14.2 million). This is the third consecutive quarter that the companies sees bleak business results.
Notably, in the fourth quarter of this year, VIS acquired VND1.372 trillion ($59.65 million) in revenue, down 8 per cent on-year, while the cost of goods sold was up to VND1.523 billion ($66.2 million). As a result, the company reported VND151 billion ($6.56 million) in loss through trading and service supply activities.
In 2018, VIS reported a net revenue of VND5.22 trillion ($226.95 million), down 14 per cent on-year and only 74 per cent of its annual target. The value of unsold steel in 2018 was VND943 billion ($41 million), doubling against the beginning of the year.
Kyoei is working hard to buy VIS shares. In December last year, the company announced spending VND37 billion ($1.6 million) on buying 1.5 million VIS shares at the price of VND25,000 apiece. After the purchase, Kyoei increased its holding in VIS to 73.81 per cent or 54.4 million shares. The second largest shareholder is Thai Hung Trading JSC.
Kyoei became the strategic partner of VIS in late 2017 after buying more than 14.7 million shares, or 20 per cent, from Thai Hung Trading JSC.
In May 2018, the Japanese firm purchased another 33.2 million VIS shares from Thai Hung and replaced the latter as the strategic investor of VIS with 65 per cent ownership.
Continuing to purchase more VIS shares shows Kyoei’s ambition to fully acquire VIS, increasing its dominance in the Vietnamese steel manufacturing sector.
However, after becoming the largest shareholder, Kyoei still failed to turn VIS around.
By Kim Oanh