Recently, the “steel king” Hoa Phat has announced positive business results, with net revenue reaching VND 30,852 billion, up 16% year-on-year in 2023; net income of VND 2,869 billion, 7.2 times higher year-on-year and close to the previously announced figure.
In particular, the steel segment continues to account for the largest proportion, contributing 93% of consolidated revenue, with the agricultural segment ranking second with 5%, and the real estate segment accounting for 2%.
The recovery of steel sales was the main driving force for the positive business results of HPG, in which Hoa Phat’s construction steel was supplied for public investment projects, while HRC steel also saw high demand in the domestic market.
With these results, Hoa Phat has fulfilled 22% of its revenue target and 28% of its profit plan.
Q1/2024 Business Results of HPG
Unit: Billion VND
Source: VietstockFinance
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Debt Soars
However, there has been a notable change in the balance sheet as the company’s outstanding debt has increased significantly. At the end of Q1/2024, Hoa Phat’s short-term and long-term debt outstanding exceeded VND 77,000 billion, up over VND 12,000 billion compared to the beginning of the year, reaching the highest level in the company’s operating history.
Hoa Phat said that the increase in debt was due to the procurement of materials and the disbursement of funds for the Dung Quat 2 Iron and Steel Complex project. In the first quarter of 2024, the company poured nearly VND 4,250 billion into this project, bringing the total accumulated investment capital disbursed to the end of Q1/2024 to VND 26,800 billion (over 1 billion USD).
Regarding the progress of the Dung Quat project, Mr. Tran Dinh Long shared at a recent event that Phase 1 of the Dung Quat project is expected to become operational in 2025, and the entire Dung Quat 2 project is expected to be completed in September 2026. After the Dung Quat 2 project comes online, the group will have an additional output of 5.6 million tons of HRC, raising the total HRC production capacity to 8.6 million tons.
On the other hand, Hoa Phat’s total assets have reached nearly VND 202,000 billion, up over 7% compared to the beginning of the year, of which cash and cash equivalents stand at VND 34,700 billion.
