Vinachem subsidiary DHB appoints new CEO to tackle losses
Habac Nitrogenous Fertilizer & Chemicals Co., Ltd. (HANICHEMCO – code DHB), a branch of Vinachem, has just appointed Nguyen Duc Ninh, member of the Board of Directors (BoD) and deputy general manager, as the new CEO for a term of three years, effective from October 5. At the end of the second quarter this year, DHB's accumulated losses exceeded VND2.876 trillion ($125 million).
On December 25 last year, DHB suddenly announced terminating the term of Doan Doan Hung as general manager from January 1, at the same time appointing Nguyen Duc Ninh to take over the role.
Since then, Nguyen Duc Ninh has been officially appointed as CEO of DHB. Previously, he held a series of other positions in DHB since 1993.
After being equitised on January 1, 2016, DHB recorded the loss of more than VND1 trillion ($43.48 million) wthin the same year. As of December 31, 2018, DHB recorded cumulative losses of over VND2.65 trillion ($115.22 million).
DHB's business did not improve under Nguyen Duc Ninh in the first half 2019, with the gross profit of VND1.6 trillion ($69.57 million), up only 1 per cent compared to the VND1.56 trillion ($67.83 million) in 2018. After deductibles, DHB ended up with a loss of VND220 billion ($9.57 million), increasing accumulated losses to VND2.876 trillion ($125 million), equivalent to a negative equity of VND108 billion ($4.7 million).
One of the reasons leading to the losses of DHB is loan interest. The total debts to pay until the end of this second quarter were VND9.47 trillion ($411.74 million), including VND1.586 trillion ($68.96 million) of short-term financial loans and VND6.11 trillion ($265.65 million) of long-term financial loans.
DHB added that the company is currently struggling with large financial costs, especially since the beginning of this year. The company has not managed to arrange an extension to its repayment schedules with lenders, and has been unable to balance its finances to pay off debts, racking up overdue interest of 18 per cent on overdue capital.
In 2019, DHB expects a revenue of nearly VND3.041 trillion ($132.22 million) and expects negative after-tax deficit of more than VND530 billion ($23 million).