SMC announces the business plan for 2024
Steel NewsDate: 10-01-2024 by: Nhu Quynh
The SMC Trading and Investment Company has just announced its business plan for 2024. According to the plan, SMC aims to achieve a consumption output of 900,000 tons of various types of steel with an after-tax profit of 80 billion VND.
In 2023, the business incurred significant losses
In 2023, SMC Investment and Trading Joint Stock Company experienced a significant decline in business results compared to the previous year. At the beginning of the year, the company set a post-tax profit target of 150 billion VND. However, after the first nine months, the business situation did not look promising. In Q3/2023 alone, SMC achieved a consolidated net revenue of 3.141 trillion VND, a 44% decrease compared to the same period last year.
Operating below cost, along with various expenses, led to SMC incurring a post-tax loss of 178 billion VND, compared to a loss of 219 billion VND in the same period. Accumulated over the first nine months of the year, SMC recorded a gross revenue of 10,574 billion VND, a 44% decrease compared to the same period in 2022. By the end of 2023, SMC reported a total loss of 586 billion VND, wiping out accumulated undistributed profits of more than 343 billion VND recorded at the beginning of the year. This resulted in an accumulated loss of 205.8 billion VND on the balance sheet as of September 30, 2023.
SMC is not only facing business difficulties, but its debt recovery situation is also stagnant as real estate enterprises, lacking significant revenue sources, contribute to its substantial losses. By the end of September 2023, SMC had more than 1,300 billion VND in bad debts, of which 98% were short-term debts. The majority of these debts were from real estate companies associated with Novaland.
In the context of challenging business operations, the Board of Directors of SMC has unanimously agreed on the strategy to streamline production and business activities, reduce personnel across the entire SMC system, and cut down on all arising expenses. In November 2023, the company's Board of Directors approved the transfer of the right to use 6,197 square meters of land at SMC Binh Duong-Dong An Industrial Park.
Business plan for SMC in 2024
The profit picture for the business in 2023 wasn't very bright. Recently, SMC Trading and Investment Company announced its business plan for 2024. Accordingly, SMC aims to achieve a consumption output of 900,000 tons of various types of steel in 2024, with an expected after-tax profit of 80 billion VND. This is considered a positive figure compared to the significant loss of 586 billion VND in the first nine months of 2023 and the accumulated undistributed loss as of September 30, 2023, which stood at 205.8 billion VND.
Additionally, the Board of Directors of SMC has also approved a plan to pre-purchase the bond batch worth 200 billion VND with the code SMC 2124001, bearing a fixed interest rate of 8.2% per annum, issued in August 2021 (due in August 2024). The collateral for this bond includes 9.1 million NKG shares of Nam Kim Steel Corporation and SMC shares owned by a third party. SMC stated that the anticipated repurchase date is June 2, 2024 (6 months before maturity), after reaching an agreement with the bondholders and obtaining approval from the relevant authorities. The current bondholders in this batch are Shinhan Vietnam Limited Liability One Member Bank and Shinhan Vietnam Limited Liability Securities Company.