Hoa Phat’s profit expected to reach VND2.8 trillion in Q1

On April 11, 2024, Hoa Phat Group Joint Stock Company (HPG) organized the 2024 Annual General Meeting of Shareholders (AGM), with the attendance of nearly 700 shareholders, representing 68% of shares with voting rights. The AGM approved the 2024 business target of VND140 trillion in revenue and VND10 trillion in after-tax profit. According to Chairman of the Board of Directors Mr. Tran Dinh Long, by the end of the first quarter of the year, Hoa Phat Group achieved VND31 trillion in revenue and VND2.8 trillion in after-tax profit.

The Board of Directors for the 2021 - 2026 term includes 9 members

HPG's General Meeting of Shareholders approved all meeting contents, such as the business plan, stock issuance plan to increase charter capital from equity in 2023 at a rate of 10%. The dividend payment rate in 2024 is expected at 10%. HPG shareholders also voted to approve to add two new members of the Board of Directors for the 2021-2026 term, including Mr. Chu Quang Vu and Mr. Dang Ngoc Khanh, bringing the total number of HPG Board of Directors members to 9 people.

Solid steel spirit

Hoa Phat has prioritized good management of cash flow, inventory, production and business in accordance with the market situation. It has also closely followed the investment progress of large projects, especially the Dung Quat 2 Iron and Steel Production Complex as well as ensuring effective control of projects.

In 2023, Hoa Phat Group recorded VND120.3 trillion in revenue and VND6.8 trillion in profit, reducing 16% and 19% respectively compared to 2022. Its profit in 2023 reached 85% of the set plan and decreased compared to 2022, mainly due to a 22% year-on-year decrease in profit from the steel business.

In particular, revenue and after-tax profit of the steel segment (including iron and and steel products) account for 94% and 92% of the group’s total, respectively. Hoa Phat Group planned to optimize the operations of existing livestock farms, resulting in an increased profit of agricultural group to 236% compared to 2022. The real estate sector completed its revenue and after-tax profit targets compared to assigned plan.

The home appliance segment launched a series of new products, aiming at the convenience and health protection for consumers. Sales output grew strongly thanks to multi-channel distribution. Hoa Phat Group has provided a series of products such as air conditioners, air coolers, freezers, refrigerators, water purifiers, induction cookers, range hoods... In early 2024, the group launched a series of three functions water purifiers, standing cabinet RO water purifier, new generation underground RO water purifier etc.

Revenue from export activities reached VND34.2 trillion, equivalent to US$1.5 billion and contributed 28% of the group's total revenue. A total of more than 2.2 million tons of Hoa Phat steel products have been exported to over 30 countries and territories in the world. Export activities help diversify consumer markets, while contributing to foreign exchange earnings and balancing Vietnam's trade balance.

In 2023, Hoa Phat Group contributed more than VND9 trillion to the State budget. It was voted as Top 1 largest private enterprise and ranked 8th in the Top 10 largest enterprises in Vietnam in 2023; Top 10 strongest brands in Vietnam; Top 50 most effective business companies in Vietnam; Top 30 largest corporate income tax payers in Vietnam.

High quality steel production takes central stage

During the discussion, Chairman of the Board of Directors Mr. Tran Dinh Long openly answered shareholders' questions about meeting contents such as 2024 production and business plan, progress of the Hoa Phat Dung Quat 2 Iron and Steel Production Complex project, issuance plan to increase chartered capital, strengths of HRC hot rolled steel products on the market, orientation for developing high quality steel, agricultural and real estate projects etc.

HPG's General Meeting of Shareholders drew the participation of 700 shareholders

Answering the 2024 business plan, HPG's board of directors said that the Vietnamese and world economies still have many unknowns, unclear signs of recovery, fluctuations in exchange rates, interest rates and other factors. On that basis, Hoa Phat Group has closely followed market developments to manage production and business accordingly. Specifically, the group sets a target of VND140 trillion in revenue and VND10 trillion in after-tax profit in 2024.

However, after the Hoa Phat Dung Quat 2 Steel Integrated Complex project is completed, Hoa Phat's revenue could reach VND200 trillion and the revenue proportion of the steel segment will account for 95% of the group's total revenue, increasing from 85-90% from the past recent years.

The board of directors also said that Hoa Phat Group is researching silic corrugated iron to produce steel used in electric motors and made from scratch. There has no company in Vietnam producing the product so far. In addition, Hoa Phat will make high-strength rail steel. Hoa Phat Group has taken the first steps and is ready to bid on the North-South high-speed railway project.

Hoa Phat Group determines that the product structure of the Dung Quat 2 project and future projects will focus strongly on producing high-quality hot-rolled steel (HRC) to serve the needs of the mechanical manufacturing industry. The group also focuses on in-depth investment to produce steel grades that require more difficult techniques, used as raw materials for the production of screws, beadwire, cables, pre-stressed steel, silic steel, and steel for high-speed train tracks etc.

In the real estate sector, the group has set a plan of not expanding, focusing on developing industrial park projects. Housing projects in urban areas can only be done when there is complete legality.

Profit reached VND2.8 trillion in Q1, more than 7 times higher than the same period last year

Mr. Long said that Hoa Phat Group achieved VND2.8 trillion in profit in the first quarter of the year, meeting 28.7% of the whole year’s set plan. The iron and steel production and steel products contributed about 90% of this result.

“The first quarter of 2024 can be said to be relatively good as the group did two things well. The first was to increase sales output over the same period last year. The second was to use up high-priced fuel inventories. This quarter may be a bit of a loss but it will be good for the following quarters. The group has never pulled inventory down as low as it is now", Mr Long added.

Chairman of the Board of Directors Mr. Tran Dinh Long openly answered shareholders' questions about meeting contents

In the first quarter of 2024, Hoa Phat Group produced 2.1 million tons of crude steel, an increase of 70% over the same period last year. Sales of construction steel, steel billet and HRC reached 1.85 million tons, posting 34% year-on-year increase. In the three month period, Hoa Phat's construction steel and high quality steel reached an output of 956,000 tons, an increase of 10 per cent over the corresponding period last year. Hot rolled steel coil reached 805,000 tons, posting 67% year-on-year increase.

Regarding the Dung Quat 2 project, the HPG’s leader said that the project has a total investment capital of VND85 trillion with designed capacity of 5.6 million tons of high quality hot rolled coil (HRC) steel a year. The project has been implemented from the first quarter of 2022. By the beginning of 2024, the project reached over 50% of all main items. It is expected that when Dung Quat 2 is completed in 2025, Hoa Phat's total HRC production capacity will increase to 8.6 million tons a year.

In response to a shareholder's question about the proposed anti-dumping investigation of hot rolled steel, Chairman of Hoa Phat Group said that it is unacceptable to domestically produce 6.7 million tons while importing up to 9.6 million tons of hot rolled steel in 2023 with 6.2 million tons from China alone. The proposal to initiate an anti-dumping investigation is according to WTO standards and is very normal. Through the process of investigation and comprehensive and objective assessment, the State management agency will clearly delineate this according to regulations.

Shareholders paid attention and asked many questions about the steel production and business sector

“No country in the world accepts a larger amount of imported steel than domestic production. 30 years ago, Vietnam only produced 300,000 tons of steel and was not in the world steel map. But now it is proud to be on the map, especially producing manufactured steel and high-quality steel. Vietnam is also currently the largest steel producer in ASEAN with over 20 million tons. Steel is the bread of industry. Looking at recent conflicts in the world, it is easy to see that steel is very meaningful to the defense industry and national security. The Party and State's policies always support and encourage upstream industrial production. Therefore, we hope everyone will support domestic production in general, especially upstream industries," Mr. Tran Dinh Long shared.

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