Steelmaker Pomina treads water as losses mount, awaits lifeline from Vingroup subsidiary

With production running at a bare minimum and still being deep in the red in 2025, Vietnamese steelmaker Pomina is struggling to stay afloat while waiting for concrete support from Vinmetal, a subsidiary of conglomerate Vingroup.

Pomina’s business performance showed no clear improvement in 2025, as both the company and Vinmetal have yet to announce specific commitments or a detailed roadmap for cooperation.

According to Pomina’s consolidated financial statements for the year, the company, listed on the Unlisted Public Companies Market (UPCoM) as POM, continued to post losses in Q4, with an after-tax loss of VND325 billion ($12.52 million), up 62.96% year-on-year.

For the full year, its net revenue reached VND2.18 trillion ($83.98 million), down 6.3% from nearly VND2.33 trillion in 2024.

On a more positive note, gross profit rebounded to VND107 billion ($4.12 million), a marked improvement from the gross loss of VND80 billion recorded a year earlier.

However, persistently high financial and other expenses eroded these gains, leaving Pomina with an after-tax loss of VND838 billion ($32.28 million) for 2025, only marginally better than the VND991 billion loss in 2024.

One of the most notable developments during the year was a sharp contraction in inventory. Total inventories fell nearly 51%, from VND794 billion at the beginning of the year to VND386 billion ($14.87 million) at year-end.

Finished construction steel products plunged by 92.5%, from VND325 billion to just VND24.4 billion ($940,000), while raw materials declined by 71.8%, from VND118 billion to VND33.3 billion.

By contrast, inventories of lime products, steel billets, and pig iron-sinter remained largely unchanged. This uneven movement suggests that Pomina has halted or suspended production at certain stages, underscoring its current state of operating at minimal capacity.

In their explanation of Q4 results, the leadership said depreciation expenses arising during production stoppages were reclassified into other cost items. It is worth noting that the blast furnace project has yet to be recognized as an asset and therefore has not generated depreciation expenses. Depreciation recorded during the period mainly related to assets that remain in operation.

Overall, Pomina’s core operations continue to generate some value added. However, with annual revenue just above VND2,000 billion ($77 million), far below the roughly VND14,000 billion recorded during the 2018-2022 period, plant utilization rates remain extremely low.

Meanwhile, fixed costs such as depreciation and labor are difficult to cut proportionally, continuing to weigh heavily on the company’s financial performance.

Cash flow pressures ripple through shareholder structure

After vice chairman and CEO Do Tien Sy was granted expanded executive authority, Pomina’s parent company, Viet Steel Trading MTV Co., Ltd. (Viet Steel), began taking more concrete steps to address mounting financial pressure across its ecosystem.

Financial statements show Pomina is carrying receivables from Viet Steel totaling VND684 billion ($26.35 million). In addition, it has made advance payments for goods to its parent worth around VND24 billion. These figures indicate that despite its own losses and tight cash position, Pomina is effectively providing financial support to Viet Steel.

Earlier, on January 19, 2026, Viet Steel began selling 7.5 million POM shares to repay debts on Pomina’s behalf. However, at a market price of roughly VND7,500 ($0.29) per share in the January 30 trading session, the proceeds were estimated at just VND56 billion ($2.16 million), far short of the VND684 billion receivable Pomina is currently booking.

Another noteworthy detail appears in the notes to short-term accrued expenses, where Pomina recorded a “payable to Viet Steel – offset for building No. 289” valued at VND167 billion ($6.43 million). The address corresponds to Viet Steel’s headquarters at 289 Ly Thuong Kiet street, Phu Tho ward, Ho Chi Minh City.

Market sources say the building at 289-291-291/1 Ly Thuowng Kiet street was offered for sale in January 2026 at a price of around VND175-180 billion ($693 million). The property has a total floor area of nearly 2,000 square meters, featuring one basement, seven floors, a rooftop, and an elevator, and is currently leased for approximately VND350 million ($13,483) per month.

Earlier in November 2025, Vingroup said its steel subsidiary VinMetal will provide Pomina Steel with a zero-interest working capital loan for up to two years, helping the troubled steelmaker stabilize operations and restore cash flow.

The preferential funding is expected to support Pomina in improving its cash flow and rebuilding its supply chain, ensuring manufacturing continuity and gradually improving its financial indicators.

Alongside financial support, Vingroup will also prioritize sourcing steel from Pomina for its ecosystem companies such as electric vehicle manufacturer VinFast, property developer Vinhomes, and high-speed rail company VinSpeed, helping increase the localization rate of materials in Vingroup’s key domestic projects.