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Ha Bac Fertiliser reports accumulated loss of $108.4 million
Reporting the massive consecutive loss will cause Ha Bac Nitrogenous Fertiliser & Chemicals JSC (Ha Bac Fertiliser) to run out of equity capital, resulting in difficulties in maintaining its operation.
Ha Bac Fertiliser has released its financial statement of the second quarter of this year. In the second quarter alone, the firm acquired VND843.3 billion ($37.3 million) in net revenue in terms of sale and service supplying and VND160 billion ($7.07 million) in gross profit, signifying an increase of 23.4 per cent in net revenue and 35 per cent in gross profit on-year. Its financial revenue reached VND5.3 billion ($234,513).
In spite of seeing increased business results, the soar in financial and other expenditures meant the firm reported a net loss of VND83.3 billion ($3.86 million) in the second quarter of the year. Notably, the firm reported doubled sales expenditure and an increase of 39.4 per cent in managing expenditure. Financial expenditure reached VND207.7 billion ($9.19 million), VND184.3 billion ($7.99 million) of which went on paying interest.
As the result, after two quarters this year, Ha Bac Fertiliser reported a net loss of VND170 billion ($7.52 million). The accumulated loss as of the end of the second quarter reached VND2.5 trillion ($108.47 million).
Due to the bleak financial results, the company was ignored by investors when it listed on the UpCoM trading platform in late July 2017.
Notably, on July 26, Ha Bac Fertiliser had 272.2 million shares officially available for trading at the initial reference unit price of VND6,800, representing a registered capital of VND2.71 trillion ($119.2 million). At present, the share value is VND1,400.
A subsidiary of state-run Vietnam National Chemical Group (Vinachem), Ha Bac Fertiliser specialises in manufacturing urea nitrogenous fertiliser, which makes up 80 per cent of its revenue.
However, in recent years, the domestic demand for urea fertiliser fell far short of supply, leading to an extreme imbalance. The domestic fertiliser manufacturing sector has to compete with imported products, especially cheaper Chinese ones.
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