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VN’s Hoang Anh Gia Lai posts biggest loss

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Workers at one of HAG’s banana farms. The company’s revenue mainly relied on agricultural products in 2020. HAG/VIET NAM NEWS

VN’s Hoang Anh Gia Lai posts biggest loss

The fourth quarter result of Ho Chi Minh City-listed Hoang Anh Gia Lai (HAG) showed that the company lost nearly 2.2 trillion dong ($96 million) last year as it struggled to manage businesses due to Covid-19.

HAG’s net revenue increased 52.7 per cent year-on-year to 920.4 billion dong in the last quarter of 2020. The main source of its revenue came from selling fruits with a value of 538 billion dong in the same period. Revenue from selling hogs also reached 121 billion dong for the first time.

Despite an increase in revenue, its gross profit was zero as the selling price was affected by Covid-19. It had to sell products under cost prices. The company posted a gross loss of nearly 168.5 billion dong in the fourth quarter.

However, its financial activities income surged up to 784 billion dong in the last quarter of last year. The gain was boosted by liquidating investments and the decline of 439 billion dong in financial activities expenses.

When the companies’ businesses were heavily affected by Covid-19, HAG’s executive board decided to review its previous data which related to estimation and provision for receivables under conservatism principles.

Accordingly, it applied a retrospective adjustment to its 2019 consolidated financial report by increasing provision for accumulated receivables, leading to a rise in general and administrative expenses and other expenses.

The result was HAG reported a loss after tax of over 1.5 trillion dong in the fourth quarter, of which the parent company’s loss after tax was nearly 1.2 trillion dong.

In 2020, its consolidated net income gained nearly 49 per cent year-on-year to 3.1 trillion dong and loss after tax was nearly 2.2 trillion dong. In 2019, the company recorded a loss after tax of over 1.9 trillion dong.

As of December 31, its liabilities were over 26.6 trillion dong, of which short-term borrowing was nearly 8.5 trillion dong and long-term borrowing was over 9.6 trillion dong.

Recently, HAG president Doan Nguyen Duc has registered to sell 21.78 million shares for financial restructuring. After the deal, the number of HAG shares in Duc’s assets will decline to over 319 million units, equivalent to 34.5 per cent ownership.

Meanwhile HAG also registered to sell 75 million Hoang Anh Gia Lai Agricultural JSC (HNG) shares for loans restructuring. After the sale, the number of HNG shares that HAG owns is over 330.1 million.

Both of the deals are expected to be executed under the method of agreement from February 5 to March 5.

At current prices, the deals will bring over 93 billion dong for Duc and more than 800 billion dong for HAG.

On the Ho Chi Minh Stock Exchange (HoSE), HAG shares ended at 4,560 on February 5, up 2.24 per cent, while HNG shares remained flat at 11,100 dong.

From December 31, 2020 to January 19, 2021, HAG completed the deal to sell nearly 47.5 million HNG shares.



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