On February 24, the Hanoi Stock Exchange (HNX) announced that it would continue to maintain trading restrictions on shares of Thong Nhat Sheet Steel JSC (UPCoM: TNS).
The reason is that the auditing organization refused to give an opinion on the 2022 Financial Statements and gave an unqualified opinion on the 2023 and 2024 Financial Statements.
In fact, TNS has been put on restricted trading list by Hanoi Stock Exchange (HNX) according to the decision dated March 13, 2023, because the audited financial statements for 2022 were rejected by the auditing organization. TNS shares are therefore only traded on Fridays every week.
In the 2024 audited financial statements, the independent auditing organization AASC stated that the Company had not fully recorded the interest expense payable to Vietnam Steel Corporation - JSC (Vnsteel, UPCoM: TVN) and the late interest expense with Phu My Sheet Steel Company Limited - Vnsteel (PFS), accumulated to December 31, 2024, nearly VND 55 billion. This led to the balance sheet recording an insufficient amount in the Short-term payables item, while reflecting an excess amount in the Profit after tax and "Other short-term receivables" items.
At the same time, the business results report shows that the 2023 Financial Expenses indicator is reflecting a lack of money, leading to a surplus in pre-tax profit.
In addition, at the end of 2024, the total overdue debt was nearly VND 154 billion (nearly VND 219 billion at the beginning of the year). Short-term debt also exceeded short-term assets, the amount was VND 113.5 billion (nearly VND 148 billion at the beginning of the year). The quick ratio was only 0.1 times (lower than the level of 0.18 times at the beginning of the year). The company had an accumulated loss of VND 122 billion, and its debt was 4.7 times higher than its equity. According to AASC, the Company has not reached a significant agreement on debt extension, so it will not be able to arrange financial resources to pay for due debts. However, the 2024 financial statements are still presented on the assumption of continuous operation.
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In fact, the above two opinions have been stated in previous financial statements, such as the audited financial statements of 2022 and 2023. In the explanatory document, TNS said that these issues had been explained in previous reports, and this was just a re-issue of the audit.
Regarding the guarantee interest expense of TVN and PFS, TNS said that due to the difficult situation, the Company has worked with the above two units on a debt repayment plan and will not calculate interest on outstanding debts in the 2016-2023 financial statements.
Regarding loans due for payment before December 31, 2024, the Company believes that the financial situation is very difficult and has repeatedly sent official dispatches to defer debt, reduce interest rates, and extend payment terms. The Company is still trying to maintain debt repayment on schedule.
Looking back at the whole year of 2024, TNS recorded a positive recovery. Thong Nhat sheet steel brought in net revenue of VND 2,555 billion, an increase of 130% over the previous year. Profit after tax was nearly VND 48 billion, the second highest in history and nearly 12 times higher than the same period.
This result helps the company far exceed its 2024 target. It is known that in 2024, Thong Nhat Sheet Steel sets a revenue of 1,000 billion VND and after-tax profit of 800 million VND.
According to the company's explanation, the steel market in 2024 has overcome the most difficult period and is gradually stabilizing. Although it cannot be confirmed that the steel industry has completely recovered due to the impact of global economic fluctuations, thanks to efforts to expand the market and find sources of goods at reasonable prices, Thong Nhat Sheet Steel has recorded positive results.
Although there is still an accumulated loss of more than VND 122 billion due to poor business results in many previous years, 2024 is still a turning point when the company significantly narrows the accumulated loss, from VND 170 billion at the end of 2023.
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