The annual general meeting of Hoang Anh Gia Lai International Agriculture Joint Stock Company (HAGL Agrico – HNG) held on the morning of May 4, 2024, presented ambitious plans for agricultural development, including several large-scale projects. The company intends to invest 1,574 billion VND in agriculture alone this year.
This year, the company aims to cultivate 1,533 hectares of bananas, invest in seven cattle breeding farms, and import 5,800 female cattle for livestock farming.
Additionally, they plan to invest in a cluster for producing bedding pads and organic fertilizer and a cluster for raw material warehouses. They will also cultivate 468 hectares of grass for livestock farming and 127 hectares of concentrated grass to support their livestock operations.
HAGL Agrico plans to continue making a loss in 2024, with an expected loss of 120 billion VND. (Illustrative image)
Beyond these new investments, HAGL Agrico will reclaim and level 3,500 hectares of banana plantations and cattle farms, invest in construction machinery and industrial equipment, and develop water channels.
As of the first quarter of 2024, the company has accumulated a loss of over 8,000 billion VND. With losses persisting, the company projects a net loss of 120 billion VND for 2024, marking the fourth consecutive year of losses. However, this year’s projected loss is significantly lower than the 1,098 billion VND loss recorded in 2023.
In terms of revenue, HAGL Agrico aims for a 15% increase from the previous year, targeting 694 billion VND. In 2023, the company reported a 18% decline in revenue compared to 2022, with 606 billion VND in revenue.
The management reported to shareholders about their large-scale agricultural investment project for the period 2024-2028, which includes plans to cultivate 10,000 hectares of fruit trees, comprising 8,000 hectares of bananas and 2,000 hectares of pineapples.
Additionally, they aim to develop 14,000 hectares of cattle farming combined with fruit tree cultivation, including 5,000 hectares of mango, grapefruit, and durian trees, and target a cattle herd of 210,000 heads.
The total investment for this project is estimated at 750 million USD, equivalent to 18,090 billion VND.
With this level of investment, HAGL Agrico forecasts a revenue of 13,500 billion VND by 2028 and expects to turn a profit of approximately 100 million USD, or 2,450 billion VND.
Earlier this year, the Ho Chi Minh City Stock Exchange (HOSE) sent a notice to HAGL Agrico, noting the possibility of mandatory delisting due to consecutive years of net losses.
Responding to shareholders’ concerns about potential delisting and requests for special treatment, Chairman of the Board of Directors Tran Ba Duong emphasized the importance of compliance with regulations and transparent corporate governance and operations.
Currently, the company’s value stands at 11,000 billion VND, with a loss of 8,000 billion VND. Despite the losses, Thaco remains committed to supporting HAGL Agrico’s investments.
”
I have a significant stake in agriculture in general and HAGL Agrico specifically. While shareholders may worry about delisting, I believe that transparency and forming a realistic valuation are crucial. Even if we move to UPCoM, effective management and positive developments can drive stock prices upward
,” Mr. Duong assured the shareholders.
According to Chairman Tran Ba Duong, the company has established a development model, and the next step is to focus on efficient management and operations to turn a profit. HAGL Agrico aims to achieve stable revenue by 2025 and become profitable. The company strives for transparency and realistic valuations to ensure that stock prices accurately reflect their performance.
Vice Director Nguyen Hoang Phi added that according to securities laws, the company, having incurred losses for three consecutive years, will be delisted and moved to UPCoM. To relist on the stock exchange, the company must demonstrate profitability for two consecutive years before applying for relisting. There is no scope for requesting special treatment.
Meanwhile, the auditor emphasized the need to comply with legal requirements. Investing in agriculture is not a quick fix, and even if the company maintains its listing, it may take several years to see positive financial results. Shareholders need to accept this reality and adopt a long-term perspective for this industry.
Previously, in a document sent to HOSE, the management of HAGL Agrico acknowledged the accumulated loss after tax not distributed as of December 31, 2023, amounting to 8,053 billion VND. As a result, HNG stock is under supervision and faces the risk of delisting due to consecutive years of losses.
However, the management team expressed confidence in the company’s sustainable development and profitability in the coming years, aiming to gradually reduce losses in the shortest possible time.
As of the market close on May 3, HNG stock was trading around 4,000 VND per share.
HAGL Agrico’s financial report for the first quarter of 2024 revealed a 25% decline in revenue compared to the same period last year, with revenue reaching nearly 94 billion VND. The company incurred a net loss of 47 billion VND after expenses. While still in the red, HNG’s loss is showing signs of improvement. In the first quarter of 2023, the company reported a net loss of 112 billion VND.
Explaining the reasons for the loss, the management cited various factors, including a significant drop in fruit tree revenue at the beginning of the year, with a yield of only 3,529 tons compared to 6,577 tons in the same period last year.
As of the first quarter of 2024, HAGL Agrico’s accumulated loss stood at 8,100 billion VND, with total borrowings exceeding 8,800 billion VND.
