Pomina Steel (POM) lost 110 billion in the third quarter, the chairman's family divested capital again

POM Chairman's family continuously divests capital

Pomina Steel Corporation (Code: POM) has just announced information about the transaction of Ms. Do Thi Nguyet, sister of Chairman of the Board of Directors - Mr. Do Duy Thai. Specifically, Ms. Nguyet registered to sell 3.5 million POM shares, the transaction period took place from November 22 to December 20 by agreement and order matching.

If the transaction is successful, Ms. Nguyet will reduce her ownership ratio at POM from 4.6 million shares (equivalent to 1.64%) to only nearly 1.1 million shares (equivalent to 0.39%).

pomina pom lo quy 3 steel added 110 billion people president continuous phone call image 1 — Family members of the chairman of Pomina Steel (POM) continuously divest capital in the context of the company's loss-making business (Photo TL)

In the trading session on November 17, 2023, the code POM is priced at VND 4,890/share. Thus, Ms. Nguyet is expected to earn about VND 17 billion from the transaction of selling 3.5 million shares above.

Also a few days ago, Chairman Do Duy Thai's sister, Ms. Nhung, registered to sell 6.57 million POM shares, equivalent to 2.35% of the company's charter capital. The transaction period is from November 15 to December 14, 2023, by negotiation or order matching.

The divestment of the POM chairman's family took place in the context of the company's not-so-bright business results. The continuous business situation below cost price caused POM to record losses in the most recent quarters.

Pomina Steel lost another 110 billion in the third quarter

According to the recently announced Q3 financial statements, Pomina Steel achieved revenue of VND503.5 billion, down 83.1% over the same period. Cost of goods sold accounted for VND508.7 billion, causing the company to suffer a gross loss of VND5.2 billion from its core business activities.

During the period, financial revenue reached 11.3 billion VND, down 32.3%. Financial expenses, mostly interest expenses, decreased by half to only 58.9 billion VND. Sales expenses currently account for 1.2 billion VND while business management expenses recorded a negative 6.9 billion VND. As a result, POM's net loss from core business activities was 47.1 billion VND.

After deducting expenses and taxes, Pomina Steel recorded a loss after tax of VND110.4 billion. This loss was much lower than the same period last year when it lost VND715.6 billion.

In the first 9 months of the year, Pomina Steel's cumulative revenue reached VND2,948 billion, down 73.5% over the same period. After-tax profit recorded a negative VND647.4 billion, slightly lower than the loss of VND707.5 billion in the first 9 months of 2022.

Compared with the 2023 business target of VND 14,000 billion in revenue and VND 300 billion in after-tax profit, POM has only completed 21% of the revenue plan and is almost certain to not be able to complete the annual profit plan.

Long-term debt increased by 55%, business cash flow was heavily negative

By the end of the third quarter of 2023, POM's total assets reached VND 10,688.9 billion, down 3.1% year-on-year. The company's cash balance dropped from VND 206.3 billion to only VND 14.3 billion. Thus, in just the first 9 months of the year, POM's cash "evaporated" 93%.

Long-term assets account for a large proportion of 7,343.8 billion VND. Of which, unfinished construction costs account for 5,796.9 billion VND.

In the capital structure, POM recorded payables of VND8,690.4 billion, equivalent to 81.3% of total capital. The company is also borrowing short-term debt of VND5,205.1 billion and long-term debt of VND1,146 billion. Of which, the amount of long-term debt tends to increase by 55% compared to the beginning of the year.

In the Q3/2023 cash flow report, POM recorded a negative net cash flow from operating activities of VND 253.2 billion while the same period was still positive at VND 46.6 billion. Notably, the amount spent on interest expenses amounted to VND 168.8 billion, showing that the interest pressure is very large on POM's cash flow.

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