King of pangasius suffers heavy loss

Hung Vuong Joint Stock Company (HVG)’s consolidated audit statement for the fiscal year 2016-2017 has reported a negative after-tax profit of VND705 billion ($31 million) instead of the VND63 billion ($2.8 million) self-reported profit figure. 

HVG's audited financial statement shows a far different picture from the unaudited version

HVG’s revenue was VND15.514 trillion ($683.4 million), a 13 per cent reduction compared to 2016, including VND14.435 trillion ($636 million) of total expenses and VND1.079 trillion ($47.5 million) of profit.

Revenue from processed fisheries and acquaculture products hit VND7.311 trillion ($322 million), accounting for 47 per cent of the total revenue. Revenue from financial activities was nearly VND100 billion ($4.4 million), up VND11 billion ($0.5 million) on-year, while expenses were over VND478 billion ($21 million), reducing VND35 billion ($1.54 million) on-year.

In 2017, the company also spent over VND756 billion ($33.3 million) on enterprise management costs, 2.8 times as much as in 2016, as the company allocated reserves of over VND566 billion ($25 million) for bad debts.

Up to the end of September 2017, the total payable amount was VND11.38 trillion ($501.2 million) including VND10.678 trillion of short-term debts, exceeding the short-term assets of VND9.868 trillion ($434.7 million).

Based on ineffective financial indicators, the auditing agency is very doubtful about HVG’s operations.

Responding to the audit statement, HVG has announced that the parent company’s after-tax profit was negative VND580.8 billion ($25.6 million) after the audit due to gross profit adjustment and increasing expenses.

Gross profit decreased by VND63.6 billion ($2.8 million) because the revenue and capitalisation of Angiang Fisheries Import Export JSC (Agifish–AGF) were downward adjusted to VND178.5 billion ($7.86 million) and VND68.5 billion ($3 million). HVG is the parent company of Agifish, with approximately 80 per cent ownership of the company shares.

Additionally, the cost of enterprise management was also adjusted due to increasing redundancy costs at all HVG ventures, decreasing the profit.