Steelmaker Pomina incurs loss for 3 consecutive years due to temporary factory closure

Vietnamese steel firm Pomina has suffered a loss for the third consecutive year as its plants remain temporarily shut down.

According to its unaudited Q4/2024 earnings report, Pomina (UPCoM: POM) recorded a net loss of nearly VND992 billion ($38.74 million) in 2024, slightly higher than its 2023 loss of VND961 billion.

The company reported consolidated revenue of nearly VND2.33 trillion ($90.92 million) in 2024, down 29% year-on-year. Domestic sales accounted for 78% of total revenue, up 63 percentage points, while exports plummeted 54%, contributing only 19%.

The cost of goods sold exceeded revenue, resulting in a gross loss of nearly VND80 billion ($3.12 million), about VND20 billion higher than the previous year.

Accumulated losses reached VND2.6 trillion ($101.58 million), 10 times the company’s owner’s equity.

Pomina stated that its factories remain idle but continue to incur costs, with interest expenses making up the largest portion, leading to ongoing losses. The company is actively seeking investors to support restructuring efforts and help restart production.

To cut costs, Pomina has cut staff and minimized office expenses. As a result, the company’s Q4/2024 loss declined by more than 16% compared to the same period the previous year.

As of end-2024, Pomina had over VND6.2 trillion ($242 milion) in borrowings and finance lease liabilities, accounting for nearly two-thirds of its total liabilities.

Among its long-term loans, the largest is a VND680 billion ($26.56 million) loan from VietinBank, borrowed in March 2019 to finance a blast furnace project at its steel billet factory in the southern province of Ba Ria-Vung Tau. The factory is designed to produce one million tons of steel per year.

This blast furnace project has been a major factor in Pomina’s financial difficulties. The company brought in Chinese experts for implementation, but the project was delayed during the Covid-19 pandemic, leading to significant losses in machinery, equipment, and labor costs.

In 2024, Pomina signed a strategic cooperation agreement with Japan’s Nansei Steel Corporation to secure raw materials for its Pomina 2 factory. Additionally, the company signed an MoU with a major investor to restart the blast furnace project this year.

POM shares were delisted from the Ho Chi Minh Stock Exchange in May 2024 after 14 years of trading.