Hoang Anh Gia Lai JSC (HAGL) is taking a defensive approach to consolidate its current position and avoid overreaching, said the agriculture corporation's chairman Doan Nguyen Duc.
Duc made the announcement at HAGL's 2023 annual general meeting of shareholders on Friday, where the firm approved a revenue plan of VND5.12 trillion ($218.19 million) and after-tax profit of VND1.13 trillion ($48.15 million) for 2023, a slight increase compared to 2022.
The company said the plan is based on the implementation of a policy to maintain production and business scale no lower than in 2022, in the context of complicated developments in the domestic and global economies.
In the first three months of this year, the company's estimated net revenue reached VND1.83 trillion ($77.81 million), with post-tax profit of nearly VND308 billion ($13.12 million).
Shareholders approved the election of Nguyen Chi Thang, director of Khan Xay One Member Co., Ltd to HAGL's board of directors. The company's board of directors currently includes chairman Doan Nguyen Duc and members Vo Truong Son, Vo Thi My Hanh, Tran Van Dai, and Nguyen Chi Thang.
The board of directors also presented a plan to issue shares under the Employee Stock Ownership Plan (ESOP) with a volume of 20 million and an issuing price of VND7,500 ($0.32) to mobilize up to VND150 billion ($6.39 million).
Duc said the ESOP would not negatively impact current shareholders, but instead bring employees together. If employees are determined to improve productivity, the stock price will increase, and shareholders will benefit, he explained.
Before the meeting, HAGL announced that its recent private placement had not been completed as fluctuating stock prices had discouraged investors.
According to the previous plan, HAGL would offer nearly 162 million shares at VND10,500 ($0.45) per share, raising nearly VND1.7 trillion ($72.45 million) that HAGL could use to supplement capital for subsidiaries and pay off part of bond principals.
HAGL chairman Duc said the corporation has not intended to conduct such a private placement again because the market is unfavorable. Therefore, the company has temporarily halted the expansion of its pig farm and banana plantations.
He emphasized the need for caution in 2023 due to market difficulties.
Regarding shareholders' concerns about the investment in HAGL Agrico (HNG), general director Vo Truong Son affirmed that HAGL only holds about 9% of its chartered capital. In the worst case, if HNG shares are delisted, the company can negotiate with partners to sell them.
HAGL reported an after-tax profit of VND1.180 trillion ($50.32 million) in 2022, an almost six-fold increase year-on-year and a record high since 2015. This positive figure was supported by a full-year 2021 provision of more than VND1.56 trillion ($66.57 million).
In 2022, the corporation's net revenue hit VND5.08 trillion ($216.7 million), nearly double that of the previous year. Of this, fruit and pork sales reached VND3.82 trillion ($162.86 million), equal to 75% of the total.
The Ho Chi Minh Stock Exchange announced on October 11, 2022 a change in the status of HAG from “controlled” to “warning” because its after-tax profit in 2021 was only VND203.3 billion ($8.42 million) while undistributed after-tax profits as of December 31, 2021 were a negative VND4.47 trillion ($185 million).
Hoang Anh Gia Lai, listed on the Ho Chi Minh Stock Exchange as HAG, closed the Friday trading session at VND7,620 ($0.32).