HAGL Agrico (HNG) incurs additional losses of $10 million after audit

HAGL Agrico (HNG) incurs additional losses of $10 million after audit

Hoang Anh Gia Lai Agricultural JSC (HAGL Agrico) has just released its audited consolidated financial report for the first half of this year.

HAGL Agrico expects to continue incurring losses in the next few quarters, with a full-year loss forecast of up to VNĐ854 billion. Photo HAG

HAGL Agrico has reported a loss of VNĐ259 billion (US$10 million) after six months, increasing by an additional VNĐ61 billion after an audit, as the company’s cumulative losses and short-term debts continue to grow.

Hoang Anh Gia Lai Agricultural JSC (HAGL Agrico) has just released its audited consolidated financial report for the first half of this year.

The primary reason for the increase in losses was the recognition of an additional VNĐ125 billion in costs for writing off ineffective assets, which were recorded under "other expenses." 

Before the audit, other expenses mainly came from depreciation of discontinued assets amounting to nearly VNĐ69 billion, but after the audit, this figure was reduced to just over VNĐ5 billion. As a result, total other expenses rose from VNĐ43 billion to VNĐ104 billion after the audit.

Additionally, interest expenses during the period spiked to VNĐ230 billion, completely eroding HAGL Agrico's profits from core business activities. This led to a pre-tax loss of nearly VNĐ260 billion, marking a reduction in losses of about VNĐ100 billion compared to the same period last year.

The company's cumulative losses increased to VNĐ9.64 trillion as of June 30 this year. Total assets reached VNĐ18.28 trillion, an increase of 9.5 per cent compared to the beginning of the year, primarily due to an increase in long-term unfinished assets to 7.4 trillion. However, the company's cash balance dropped sharply by 74 per cent, leaving only VNĐ18 billion in cash.

Total liabilities increased by 10.7 per cent to VNĐ16.67 trillion, with short-term debt accounting for the majority at VNĐ15.7 trillion, surpassing short-term assets of VNĐ12.95 trillion. 

The firm's parent company, Thaco Agri, is its largest creditor, with outstanding debts exceeding VNĐ9.33 trillion. These loans are mainly unsecured, with interest rates ranging from 6.5 per cent to 8.5 per cent per year.

The auditors from Ernst & Young Vietnam emphasised in a report the risks that could prevent HAGL Agrico’s remaining a going concern, due to its significant losses and short-term debts exceeding short-term assets.

The company stated that it was currently restructuring some of its debts, implementing projects to ensure business cash flow and working with stakeholders to resolve outstanding debts and complete legal procedures for projects in Laos and Cambodia to attract investment capital.

HAGL Agrico expects to continue incurring losses in the next few quarters, with a full-year loss forecast of up to VNĐ854 billion.

On the stock market, HNG shares are currently trading at around VNĐ6,500, down from nearly VNĐ8,000 at the beginning of the year. 

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