VietNamNet Bridge - Hoang Anh Gia Lai Group of Doan Nguyen Duc, an influential businessmen, suffered the first quarterly loss since 2008. Duc also lost VND5 trillion over the last year. 

The ‘big boss’ has been pursued by ill fortune: his businesses are facing big problems in arranging capital to maintain operation.

Hoang Anh Gia Lai Group has reported a huge loss of VND590 billion for the fourth quarter of 2015; the group’s profit in 2015 dropped to VND680 billion, less than a half of 2014.

HAGL Agrico (HNG), a subsidiary of the group, has unexpectedly changed the reported business result Q4 2015 from making profits to taking a loss of VND110 billion.

Hoang Anh Gia Lai Group said it took a loss because the cost price and financial cost increased by twofold. 

Meanwhile, HAGL Agrico said it took loss because of the investments in equipment and infrastructure items in Cambodia when closing mines. Besides, it also has to adjust the estimated expenses for the Attapeu Airport maintenance.

Duc is the chair of both businesses.

The ‘big boss’ has been pursued by ill fortune: his businesses are facing big problems in arranging capital to maintain operation.

Both Hoang Anh Gia Lai’s and HAGL Agrico’s biggest source of revenue is from agricultural production, while it is the field where they are meeting difficulties.

The reports showed that Hoang Anh Gia Lai has to sell rubber at below the cost prices, which has brought the loss of tens of billions of dong. Husbandry and cow trade brought high revenue, but the profitability was less satisfactory than expected.

What worries investors most is the sharp increase in Hoang Anh Gia Lai’s and HAGL Agrico’s debts. The former’s total debts had increased by VND12 trillion to VND32.6 trillion, or $1.5 billion by the end of 2015.

Of VND48.6 trillion worth of assets, Hoang Anh Gia Lai has VND21 trillion buried in unfinished construction works. This means that the group is still under expansion, and high profit is a ‘matter of the future’.

The trillions-of-dong debt burden

Hoang Anh Gia Lai’s short-term debts had reached VND12.8 trillion by 2015’s end, including VND8 trillion in short-term loans, or 50 percent of stockholder equity. 

Meanwhile, long-term debts had reached VND20 billion, including VND19.1 trillion in long term loans.

The high debts, plus the demand for capital in the context of unfavorable business due to the goods prices plunge in the world market, all have made Hoang Anh Gia Lai’s shareholders concerned.

Hoang Anh Gia Lai shares (HAG) have seen prices drop by 70 percent over the last year from VND22,000 to VND8,000 per share. HAGL Agrico share (HNG) price has dropped from VND35,000 per share in July 2015 to VND9,000.


VHa