Hoa Phat Group to focus resources on Dung Quat 2 Iron and Steel Complex

30/03/2023 14:00

Hoa Phat Group (HPG) approved a business plan this year with a revenue of VND150 trillion, an after-tax profit of VND8 trillion and many other important issues at it annual general meeting of shareholders held in Hanoi on March 30th, 2023.


Hoa Phat Group’s Annual General Meeting of Shareholders 2023 attracted the participation of more than 800 shareholders

The annual general meeting of shareholders took place under the chairmanship of the delegation including Mr. Tran Dinh Long - Chairman of the Board of Directors, Mr. Nguyen Manh Tuan - Vice Chairman and Mr. Nguyen Viet Thang - General Director. Especially, the meeting was attended by 840 people, representing over 1,200 shareholders (out of a total of nearly 180,000 shareholders), holding nearly 3.9 billion shares, accounting for 66.9 per cent of voting shares.

Hoa Phat achieved relatively good business results despite of difficulties in the market

Last year, Hoa Phat posted VND142.7 trillion in revenue, reducing 5 per cent compared to 2021 and consolidated after-tax profit reached VND8.4 trillion, only equal to 24 per cent of 2021. This was also the first year since 2008, its quarterly profit margin was negative.

“In 2022, Vietnam's steel industry in particular and the world in general experienced a difficult period. I predicted the situation at the annual general meeting of shareholders last year and to be honest it was worse than I expected,” said Mr. Tran Dinh Long.

However, in the general context of the steel industry, Hoa Phat Group is proud of its business results in 2022, which are the efforts of more than 30,000 employees and administration of the executive board. Even in many aspects, the results were good when the market was experiencing a lot of volatility.

95 per cent of Hoa Phat's revenue and profit came from steel production and trading. Our real estate and home appliances business achieved the set targets, the refrigeration industry achieved 200 per cent of the set plan. However, the group's revenue declined mainly due to 76 per cent profit decrease of the steel industry and agricultural profit decreased by 92 per cent over the same period of the previous year.

Last year, the group focused on research and development of high quality product lines while diversifying consumption for both local and foreign markets. Export revenue in 2022 reached more than VND31/6 trillion, accounting for 22 per cent of the group's total revenue. The export market has been diverse with nearly 30 countries and territories across 5 continents.

Resources concentrated for Hoa Phat Dung Quat 2 Iron and Steel Production Complex project

At the annual general meeting of shareholders, people asked many questions related to this year's business targets, Dung Quat 2 project, developments in the steel market trend in the near future, investment orientation in the real estate sector, household appliances, full operating time of blast furnaces, dividend payment plan etc.

At the beginning of the discussion, Mr. Tran Dinh Long said that Hoa Phat Group will not pay dividends this year. With business results in 2022, after careful consideration, the Board of Directors proposed not to pay dividends. "The Board of Directors and the Board of Management assess that the capital needs in 2023 and the following years would be large. Therefore, we must focus all resources for the project, thus deciding not to pay cash dividends. Firstly, it is an incorrect orientation. Secondly, there is no source for the dividend payment", Mr. Long shared.


Mr. Tran Dinh Long – Chairman of Hoa Phat Group had an open discussion with shareholders

In the coming time, Hoa Phat Group will regulate production according to the market situation, focusing on developing high-quality steel. The group leader added that from now until the end of the second quarter of 2023, Hoa Phat will regulate the operation of blast furnaces, in line with domestic and export market signals.

Mr. Long affirmed: Hoa Phat Group will strongly switch to high-quality steel production, in-depth investment to produce fabricated steel, steel for screw production, post-tensioning. The group would strengthen investments and export of high quality steel products.

In 2023, the group will focus its resources on implementing the Hoa Phat Dung Quat 2 Iron and Steel Production Complex project. It is expected that this project will be completed in the first quarter of 2025, increasing the crude steel capacity to more than 14 million tons per year. According to the group's leaders, when Dung Quat 2 is completed, Hoa Phat's revenue scale will increase by VND80-100 trillion per year.


Shareholders raised a lot of questions relating to Hoa Phat Group’s operation

Real estate projects and household appliances have been implemented carefully, according to the set plan and orientation. Hoa Phat Ha Nam Home Appliances Factory came into operation in September 2022. Phase 1 of the container factory project was completed and is in the process of equipment alignment. It is expected to be released in the second quarter of 2023.

In the real estate sector, Hoa Phat Group will both deploy existing industrial parks (IPs), buying or applying to expand 4-6 IPs. The group plans to have 10 IPs, including current IPs by 2030/ For housing and urban areas projects, the group will focus on developing megacities, contributing to the urbanization process of existing local residential areas. Residential real estate projects are being researched and submitted for registration.


Shareholders voted on the agenda of the meeting

At the end of the meeting, all contents of the report were approved with high consensus, including a business plan in 2023 including VND150 trillion in revenue and VND8 trillion in after-tax profit. The Annual General Meeting of shareholders also approved to not pay dividends in 2022 to reserve resources for large projects which have been in progress; plans for setting up funds, and many other important contents.

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