Hoa Phat organizes annual shareholders meeting 2016

On 31/3/ 2016 in Hanoi, Hoa Phat Group JSC (HPG) has organized the Annual Meeting of Shareholders 2016. The Meeting has passed many important issues including target of VND28,000 billion in revenue and 3.200 billion of after-tax profit for 2016.

The Meeting had participation of nearly 150 shareholders, representing 77.55% of ordinary shares that entitled to attend the meeting under the direction of Chairman of the Management Board Tran Dinh Long, Mr. Tran Tuan Duong, Vice Chairman and CEO, and two Vice Chairman Mr. Doan Gia Cuong, and Nguyen Manh Tuan.

The annual shareholders general meeting of HPG 2016 with the participation of nearly 150 shareholders, representing 77.55% of ordinary shares that entitled to attend the meeting

On behalf of the Executive Board, Mr. Tran Tuan Duong - Vice Chairman of the Board and Chief Executive Officer has reported results of operations in 2015. With the steel industry, the warming of the real estate market in particular the average housing helped for steel production and consumption to grow by 30% and 24% compared to the same period in 2014. In 2015, the Group continued to pass revenue $ 1.2 billion, exceeding 24 % of the plan year, profit after tax is VND3,504 billion, exceeding 8% of the plan year. The steel industry segment still has the largest contributor to total revenue and profit of the group, 79% of revenue and 82% of profit after tax, respectively. Total sale volume of construction steel in 2015 was 1.38 million tonnes, up 38% compared to 2014. Hoa Phat steel continues to lead the market share with 21.3% .

Aside from construction steel, steel pipe is increasingly showing the growth by very goof figures. In 2015, Hoa Phat steel pipe sales volume growth of more than 40% over the same period last year, contributing more than VND7,000 billion in revenues and continues to lead market share of the steel pipe consumption in the country.

Besides, the other industrial production sector of the Group continues to recognize the results of steady growth, contributing 12% to total revenue and 11% to the Group profit. The effects of the global economic recession, reduced purchase plus the increasingly fierce competition in the interior industry has effected clearly to the operation of this sector. However, revenue and profit 2015 of furniture product has reached 103% and 144% of the year plan, respectively. Hoa Phat Furniture retains the leading position in the sector furniture and is considered to be the top choice of customers. Hoa Phat Refrigeration with brand Funiki gradually asserted a Vietnamese brand pride, completing 119% of profit plan.

The further warming of the real estate market contributed real estate sector of Hoa Phat Group to complete the plan year earlier, occupying 4% of revenue and 9% of profit to the Group. During the year, the company continued to record sale revenue of Mandarin Garden Project, the occupancy rate of expanded Pho Noi A Industrial Park achieved 40%; occupancy rate of Hoa Mac Industrial Park’s phase I achieved more than 50%. Hoa Phat affirms the prestige brand in the field of residential real estate, and began to develop the project of Mandarin Garden 2 at 493 Truong Dinh street, Hanoi on the area of more than 1.3 ha with a total investment of VND1,500 billion, including 640 apartments and is expected to start handing over apartments to customers by 2018. Besides residential real estate, industrial estate has brought VND174 billions of profit after tax to the Group.

The agricultural sector has been investing to expand towards industrialization, large-scale. Animal feed product started to generate revenue, contributing 5% to the total revenue of the Group. In the coming years, with priority of cash flow for this segment, the Group expects this will be rife with high business efficiency in addition to traditional business.

For 2016 plan, the HPG Board of Directors identifies that 2016 continues to be a difficult year for the steel industry in the country under the pressure of oversupply powerful giant China and also is the premise of Hoa Phat to develop and implement many projects such as livestock, Mandarin Garden project 2. Phase 3 of Hoa Phat steel integrated complex has been put into operation since the first quarter 2016, contributing additionally of 60,000 tons of steel per month, bringing the total capacity supply to 180,000 tonnes each month, equivalent to about 2 million tons per year, ensuring adequate supply to the market products with competitive price.

Chairman Tran Dinh Long HPG frankly answers all questions from shareholders relating to the business areas of the Group

Hoa Phat plans for 2016 with some of the following specific criteria: Revenue plan is VND28,000 billion; Profit after tax is VND3,200 billion. Answering questions from some shareholders about the plan which seems more conservative than the results of 2015, Chairman Tran Dinh Long said: 'Profit of 2015 reached VND 3,500 billion. Hoa Phat originally built 2,500 billion profit plan for 2016 because the world economy is so bad, the prices of many raw materials of the world cyclical average reduction of 30-50%, steel products accounted for 70% of total group revenue fell sharply, besides the Chinese economy declined, making steel price sharply down, therefore, the leadership should develop a very cautious plan. We will strive to do the best".

Many shareholders expressed great interest to the field of animal feed and livestock, furniture, steel pipe or real estate of Hoa Phat. HPG Chairman also said that the Group will put into operation two animal feed factories in Hung Yen and Dong Nai with a total capacity of 600,000 tonnes this year, while the third plant will be deployed in Phu Tho province with capacity of 300,000 tons to achieve the goal of 1 million tons of animal feed by 2020. Regarding real estate, this is not a big segment. HPG is currently only developing industrial parks and apartment building in the major cities (focus on the Hanoi market). HPG only focuses on projects if it has the potential, good liquidity.

The general shareholders Meeting has approved all agenda with high consensus rate

The general shareholders Meeting of Hoa Phat Group 2016 has also passed several important contents:

- Adoption of the Report of the Board of Management and Report of the Supervisory Board

- Adoption of financial statements 2015

- Approved plan for a dividend payment 2015

- Approving the plan of setting up the funds in 2016

- Through the expected 2016 dividend

- Approving the remuneration to the Management Board in 2016

- Adoption of the bonus plan for the Directors Board of Hoa Phat Group and its subsidiaries as production and business results 2016 exceed the plan

- Through the selection of an independent auditing company audits financial statements of the Group in 2016, 2017, 2018: KPMG Limited Company.

- Voting for the dismissal of some members of the Board of Management and the Supervisory Board

With the proportion of votes unanimously for the content of the program, the HPG annual General Meeting of Shareholders has successfully. All leadership and staff of the Group determines that there will be much of difficulties and challenges in the implementation of business objectives, but believes the Group will fulfill the plan approved by the General Meeting of Shareholders. As HPG Chairman reveals, the estimated profit of the first quarter 2016 is VND900 billion.

Nghi Tran