Gilimex to spend big on industrial parks to hit $3.94 mln profit target

Binh Thanh Import-Export Production and Trading JSC (Gilimex) will invest heavily in industrial parks and buy a new factory to develop its traditional garment segment, with a view to earning VND100 billion ($3.94 million) in profit this year, much higher than last year’s figure of VND29 billion.

Gilimex, listed on the Ho Chi Minh Stock Exchange as GIL, has announced its 2024 investment budget of up to VND5 trillion ($196.7 million), including VND1.5 trillion for production and business development and VND3.5 trillion in bank loans to finance its operations.

In the past, Gilimex maintained short-term loans of less than VND1 trillion ($39.33 million) and long-term loans of about VND200 billion ($7.87 million). As of the end of the first quarter of this year, its short-term loans stood at VND150 billion, while long-term loans had reached VND228 billion.

The leadership said that the company plans to develop industrial parks in all the three regions across the nation, and borrowing was vital to implement the projects.

Gilimex will mortgage shares in its subsidiary - Gilimex Industrial Park JSC, to borrow a maximum of VND900 billion ($35.4 million) from private lender MBBank for a maximum term of 84 months. The amount will be used to finance infrastructure construction for Gilimex’s Phu Bai 4 Industrial Park in the central province of Thua Thien-Hue.

At the beginning of 2024, Gilimex JSC signed a strategic cooperation agreement with MBBank, under which the lender will provide capital for Gilimex to invest in its industrial park projects, with a total quota of VND5 trillion ($196.7 million).

Gilimex has been investing in industrial parks in Thua Thien Hue, Vinh Long, Dong Thap, Quang Ngai and Quang Nam provinces. Among them, the Phu Bai 4 IP in Hue and the Gilimex IP in the southern province of Vinh Long have been approved by the Prime Minister.

Phu Bai 4 covers 460.85 hectares with a total investment of over VND2.61 trillion ($102.66 million). Site clearance and handover, and compensation payments have reached over 90%. Its Zone A is expected to be completed in the early second quarter of this year, while Zone B is set to become partially operational in mid Q2/2025.

Gilimex Vinh Long spans about 400 hectares. Gilimex is completing legal procedures so that construction can kick off at the end of this year.

In the last quarter of 2023, the company began to record revenue from the industrial park segment with VND15 billion ($590,200), and a gross profit margin of 59%. In the first quarter of this year, Gilimex earned VND77.5 billion ($3.05 million) in revenue from this segment, with gross profit margin falling to 37%.

In the traditional garment segment, the company wants to invest in a new factory with a total investment of VND150 billion ($5.9 million), aiming to increase competitiveness in the market and accommodate 15-20 production lines.

The company’s leaders said this year they had signed contracts worth about $40 million with traditional customers. Gilimex will only focus on orders with high added value, they noted.

This year, Gilimex targets revenue of VND1.5 trillion ($59 million) and after-tax profit of VND100 billion ($3.94 million), much higher than the 2023 figure of VND29 billion but still very far from the peak period of 2020-2022, when its profit reached over VND300 billion.

On the stock market, GIL closed Friday at VND35,850 ($1.41) per share.