Pomina Steel Corporation Reports a Loss of 648 Billion Dong in the 9 Months of the Year
Steel NewsDate: 08-11-2023 by: Nhu Quynh
In recent times, the Pomina Steel Corporation project has garnered the attention of many people with an impressive net loss figure of 648 billion dong. This is one of the significant investment projects in the steel manufacturing industry in Vietnam, and it has experienced some important fluctuations.
Pomina Steel Corporation continues to incur losses in the third quarter of 2023
Previously, Pomina was the largest steel producer in Vietnam, holding a 17% market share, while Hoa Phat accounted for only 12%. However, with its strategic vision, along with low sales revenue in the challenging economic environment and high cost of goods sold, Pomina Steel Corporation lost market share to domestic competitors like Hoa Phat, Hoa Sen and others.
In 2023, Pomina Steel Corporation set a revenue target of 9,000 billion dong and a post-tax profit of a loss of 150 billion dong. However, the company continued to incur losses in the first three quarters of the year, surpassing the set target.
Recently, Pomina Steel Corporation has released its financial report for the third quarter of 2023, which showed a consolidated net revenue decrease of over 83% compared to the same period last year, down to 503 billion dong due to reduced sales volume and lower selling prices. The company continued to operate with a cost higher than revenue, resulting in a gross loss of 5.2 billion dong compared to a gross loss of 578 billion dong in the same period. As a result, in the first nine months of 2023, Pomina Steel Corporation recorded a total revenue of 2,948 billion dong, a 74% decrease compared to the same period last year, and a post-tax loss of 647 billion dong, while it incurred a loss of 707.5 billion dong in the same period of the previous year. Consequently, just within the first nine months of 2023, the losses reported by Pomina Steel Corporation significantly exceeded the initial plan.
Not only is Pomina Steel Corporation running at a loss, but its financial situation is also alarming. The company has reported negative operating cash flow of 253 billion dong compared to the same period last year. Additionally, the company has made investments of 5.19 billion dong and reported a financial cash flow of 56 billion dong. The company has also used short-term capital amounting to 4,199 billion dong to finance its long-term assets.
The reasons leading to Pomina's loss of 648 billion dong
The net loss of 648 billion dong has been surprising and contentious. There are several reasons that have led to this situation:
The steel product market has had to deal with fierce competition, particularly from imported steel products, especially those from countries like China. This competition has exerted pressure on both prices and profits for Pomina Steel Corporation.
Increased raw material prices
The prices of steel production raw materials, such as iron ore and coke, have risen significantly, affecting the cost of steel products.
The stagnant real estate market, along with a sharp drop in steel consumption and revenue during the period, has led to a significant decrease in Pomina Steel Corporation revenue. This, coupled with high fixed costs and interest expenses, has resulted in substantial losses in the past quarter.
Additionally, the shutdown of the Pomina 3 steel plant has incurred various costs, including interest expenses. It is expected that this steel refining plant will resume operations in the early fourth quarter of 2023, immediately after a private equity issuance to investors.
With Pomina Steel Corporation net loss of 648 billion dong, it presents a significant challenge, but it also provides an opportunity for the corporation to refine and grow. Currently, Pomina remains one of Vietnam's leading construction steel manufacturers. If you are interested in purchasing Pomina's construction steel products, please feel free to contact us HERE.