(HSV VIETNAM GROUP) – The company said it has found a strategic investor to restart the blast furnace project, but has not disclosed the identity of this new investor.
The August 9 trading session witnessed an increasing momentum of steel industry stocks, most notably the POM code of Pomina Steel Joint Stock Company (POM code). The market price increased by 12.5% to 2,700 VND/share, with excess buying at the ceiling price of nearly 800 thousand units.
The positive performance of the stock was recorded after Pomina announced the development strategy as well as the comprehensive restructuring of the Company.
Firstly, regarding the signing of strategic cooperation with Nansei Steel Company (Japan), Pomina officially signed a strategic cooperation contract with Pomina at the end of July 2024. In particular, Nansei will provide enough necessary raw materials for Pomina 2 Steel Joint Stock Company to operate at maximum capacity starting from September 2024, meeting the increasing demand of the market.
This is a cooperation model from raw material sources to the market, optimizing the supply chain and improving production efficiency. This strategic cooperation marks an important turning point in the development journey of both companies.
Second, Pomina also signed an MOU (memorandum of understanding) with a large and professional investor with the goal of restarting the blast furnace project in early 2025 to anticipate the need for public investment and real estate projects expected to recover strongly in 2025.
The company has not yet disclosed the identity of this new investor.
It is known that Pomina implemented the blast furnace project, completed and put into production in February 2021. Pomina 3 factory has converted from an EAF (electric arc furnace) to a blast furnace, helping net revenue increase by 42.6% and profit after tax increase by 1.5 times compared to the previous year. However, with the decline of the steel market from the beginning of 2022, the Company had to announce the suspension of blast furnace production activities from September 23, 2022, and at the same time had to terminate labor contracts with some of the company's employees due to business difficulties.
Regarding the business situation, with the high cyclicality of the steel industry, Pomina's business results also fluctuate erratically. In the past, Pomina Steel had a very prosperous business period with profits ranging from 400-700 billion VND. However, after going through the boom cycle, the business's profits went down significantly, even at a loss.
In the first quarter of 2024, Pomina recorded revenue of 471 billion VND, down 71% over the same period, with a loss after tax of 225 billion VND while the same period lost 187 billion VND. This is Pomina's 8th consecutive quarter of loss since the second quarter of 2022. As of March 31, 2024, Pomina's accumulated losses have reached 1,697 billion VND, equal to 61% of charter capital.
Ha Diem HSV