In the first three months, Pomina’s business picture remained gloomy, with a net loss of VND225 billion, marking eight consecutive quarters of business losses.
| Pomina’s quarterly business results |
The difficulties in steel business along with the burden of debt are the main reasons for Pomina’s losses.
In the first quarter of 2024, revenue plunged 71% to VND470 billion, of which domestic revenue fell by 58% and exports decreased by 37%. The company lost VND6 billion in gross profit. Along with that, interest expense increased by 89% to VND145 billion.
Pomina’s Q1/2024 business results
Unit: Billion VND
 Source: VietstockFinance
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The poor business results also continued the series of negative news at steelmaker Pomina, from delaying the submission of audited reports to delisting shares on HOSE.
A nagging problem for over 4 years
In fact, Pomina’s current difficulties stemmed from when they decided to do the blast furnace project in 2019-2020.
“To do the project, experts from China had to be brought over, but at the right time of the COVID-19 epidemic, no experts could come over. Therefore, the project was extended to 2020-2021, all costs for machinery, equipment, and labor were very large. The management always tries to keep the debt ratio below 50%, but it is still exceeded and the cash flow is exhausted, “said Chairman Do Duy Thai at the extraordinary GMS held in early March 2024.
With such a large loan and continuous business losses, Pomina has now sunk deep into a dead-end crisis from a steelmaker once comparable to Hoa Phat and is still looking for a new investor to restructure.
According to Pomina’s explanation of its first-quarter results, the Pomina 3 steel plant and the Pomina 1 plant are still suspending operations but have to bear expenses: management costs, interest expenses, etc. “The company is looking for investors to restructure so that it can resume production as soon as possible,” Pomina said.
Confusing information
Notably, the phrase “looking for investors” may confuse shareholders. Previously, Pomina announced that it had found a new investor; they also established a new company to prepare for cooperation.
* Pomina: Shares plunge after receiving a delisting order, no date set for the organization of the general meeting of shareholders
* Pomina’s AGM: New investor is a group with a large ecosystem, will be revealed in April
At the congress held in early March 2024, Chairman Do Duy Thai said the two sides were in the process of negotiating the details of the deal. He declined to disclose the identity due to confidentiality, but said the new investor is a company with a very large ecosystem.
However, new information may signal that the process is running into trouble.
