Comments on Hoa Phat Group’s capital structure

On 27 April 2020, the IR department of the company received questions from investors regarding the financial health, especially on the borrowing structure of Hoa Phat. We would like to provide the following explanation:

According to Q1-2020 financial statements, Total debt outstanding recorded VND41,343 billion, of which Short-term debt accounted for VND21,100 billion, and Long-term debt accounted for VND20,243 billion, up VND4,463 billion from the beginning of the year. Net-debt of the company however was only VND36,179 billion, thanks to VND5,164 billion of term deposits held at banks.

Our Net Debt/ Owner’s Equity at 31 March 2020 reached 0.72x. According to our internal Management report at the end of April 2020, the ratio was only 0.66x, while Net Debt/ Total Asset was 0.31x.

Total term deposit held at banks at the end of April increased to VND6,200 billion. In the post-Tet complicated socio-economic situation due to Covid 19, when Vietnam implemented the lockdown policy in the first 3 weeks of April, Hoa Phat is among the few companies with such level of liquidity.

The above-mentioned numbers suggest that Hoa Phat takes stringent financial control measures. Hoa Phat differentiates itself from other industrial competitors thanks to a healthy capital structure.

HPG