Agri major Loc Troi targets triple net profit in 2024, plans stock dividend payout till 2025

Loc Troi Group JSC, one of the biggest agribusinesses in Vietnam, has targeted VND50 billion ($1.97 million) in net profit this year, triple year-on-year.

However, this is a huge comedown from the VND400 billion ($15.72 million) target it had set for 2023.

At the firm’s 2024 AGM held on Wednesday, CEO Nguyen Duy Thuan said that given its capital-intensive operations, Loc Troi has been in cash-flow distress, not having sufficient funds to make rice purchases. This has pushed the company to seek capital from diverse sources, he said, adding that it will take several years to overcome current financial difficulties.

The company, listed on the Unlisted Public Company Market (UPCoM) as LTG, has opted to make projections instead of setting specific targets, Thuan said.

Accordingly, it has projected revenues of VND20-24 trillion ($786-943 million).

Thuan also said the company has signed rice export contracts totaling $400 million until end-2024 and that its charter capital is expected to rise to VND1.31 trillion ($51.48 million) in 2024.

In terms of capital mobilization, Thuan said LTG will seek opinions from shareholders on three options: offering private placement of shares for VND1 trillion ($39.3 million); issuing convertible bonds for VND3.5 trillion ($137.5 million); and arranging convertible loan agreements for VND3.5 trillion.

The company needs VND3.5 trillion in mid- and long-term capital to enhance the capacity of its Loc Troi and Loc Nhan rice plants, he said.

Despite its difficulties, the company intends to pay a stock dividend of 30% for 2023 and will continue this practice in 2024 and 2025 as requested by the Dutch Entrepreneurial Development Bank (FMO), which has approved a $90 million loan, said LTG chairman Huynh Van Thon.

Thon noted that the FMO loan has not yet been disbursed due to some procedural issues. However, once the credit package becomes accessible, LTG will resolve its cash flow challenges, he affirmed, estimating that VND1-2 trillion ($39.3-78.6 million) would be needed to finance business operations.

He also informed shareholders that LTG would start the process this year for listing on the Ho Chi Minh Stock Exchange.

The meeting also voted five board members for the 2024-2029 tenure: chairman Huynh Van Thon, Johan Sven Richard Boden, Mandrawa Winston Leo, Vo Tri Thanh, and Vu Hong Trang.

Last year, Loc Troi posted VND16.08 trillion ($63.23 million) in revenue, up 38% year-on-year. However, its net profit plunged 96% to VND16 billion ($628,810) due to various difficulties including access to loans, exchange rate volatility, high interest rates, and local rice prices.