Carrying an additional 1,500 billion VND in bank debt, will interest and sales costs continue to "erode" the profits of LOf International Milk?

LOF International Dairy Products Joint Stock Company (IDP), owner of famous brands such as Kun and Lof, is urgently mobilizing a large loan of up to VND 1,500 billion from commercial banks to supplement working capital. This decision was made in the context that IDP is facing many financial challenges, notably the sharp decline in the most recent quarterly profit and high debt.

Lof International Dairy Joint Stock Company (stock code: IDP) has just announced the Resolution of the Board of Directors on approving the business plan, borrowing capital and mortgaging assets at the bank.

Resolution of the Board of Directors of Lof International Milk

Accordingly, regarding the business plan, the company proposed a business plan for 2025 with net revenue reaching 8,400 - 8,800 billion VND; after-tax profit estimated at 360 billion VND to 440 billion VND.

Also according to the newly announced decision, Lof International Dairy Company has approved the plan to borrow capital/issue guarantees/issue letters of credit at the Joint Stock Commercial Bank for Investment and Development of Vietnam ( BIDV ) - Ben Nghe Branch with a limit of 700 billion VND.

At the same time, the enterprise borrows capital/issues guarantees/issues letters of credit at the Vietnam Joint Stock Commercial Bank for Industry and Trade ( VietinBank ) - Ho Chi Minh City Branch with a limit of VND 800 billion.

The purpose of borrowing capital of Lof International Milk in both cases above is to supplement working capital, issue L/C, guarantee to serve the production and business activities of products registered by the enterprise in the period of 2025 - 2026 (including milk and dairy products, non-alcoholic beverages, sausages, rice cakes,...).

According to the audited consolidated business report for the first half of 2025, Lof International Milk JSC recorded revenue of VND 3,944 billion, an increase of 12% over the same period last year.

However, this growth could not compensate for the sharp increase in expenses across the board, leading to a plunge in profits. Most notably, there was a sharp increase in expenses such as selling expenses, which increased by 81% to nearly VND1,270 billion.

Of which, marketing costs doubled, accounting for nearly VND867 billion, showing the increase in advertising and promotion spending. In addition, business management costs increased by 60%, reaching VND160 billion; financial costs increased more than 2.3 times, reaching nearly VND68 billion.

As a result, the company's after-tax profit only reached nearly 71 billion VND, down 86%, marking the lowest level in 6 years in the semi-annual cycle.

According to the financial report, by the end of the second quarter of 2025, IDP's total assets reached VND 7,404 billion. However, it is noteworthy that the payable debt increased by 20%, exceeding VND 4,220 billion and accounting for more than 57% of total capital.

Of which, short-term and long-term financial leasing loans and debts are over VND2,634 billion. Inventories reached VND765.6 billion, up 19.3% compared to the beginning of the year.

LOF International Milk was established in 2004, known for its brands Kun milk, LOF Ba Vi milk, Malto, LOF, LIF... This is a business in the ecosystem of F&B "boss" Truong Nguyen Thien Kim.

Currently, Mr. To Hai - Ms. Thien Kim's husband is the Chairman of the Board of Directors of LOF International Milk. In addition, this businessman also holds the leadership position of Vietcap Securities Joint Stock Company (HoSE: VCI).

Ms. Truong Nguyen Thien Kim is running many businesses in the F&B sector.

Meanwhile, Ms. Truong Nguyen Thien Kim is a member of the Board of Directors of LOF International Milk. In addition, this businesswoman born in 1976 also holds many leadership positions in enterprises such as Chairman of the Board of Directors cum General Director of D1 Concepts Joint Stock Company, Chairman of the Board of Directors cum General Director of Café Katinat Joint Stock Company, Independent Board Member of Ben Thanh Trading and Service Joint Stock Company (HoSE: BTT), Member of the Board of Supervisors of Mien Tay Bus Station Joint Stock Company (HNX: WCS).

Source: https://daibieunhandan.vn/ganh-them-1-500-ty-dong-no-ngan-hang-lai-vay-va-chi-phi-ban-hang-co-tiep-tuc-an-mon-loi-nhuan-cua-sua-quoc-te-lof-10390719.html