Mobilizing additional trillions of VND from shareholders, Becamex IJC brings 756 billion to pay off debt

Becamex IJC mobilizes hundreds of billions of VND to pay off debt, still pouring 666 billion into investment for Becamex - Binh Phuoc

Becamex IJC Infrastructure Development Joint Stock Company (HOSE code: IJC) has just approved a plan to offer a large number of shares to existing shareholders. The number of shares offered is up to 125.92 million shares, corresponding to the expected capital raised of about VND 1,259.2 billion.

According to the company's announcement, this source of capital is expected to be fully disbursed by the end of the first quarter of 2024. Of which, Becamex IJC plans to use VND 466 billion to contribute capital to other units, VND 756.4 billion will be used to repay principal and interest on short-term and long-term loans at banks, repay bonds and bank debts. The remaining VND 36.7 billion will be used to supplement capital for business operations.

Becamex IJC plans to mobilize 1,260 billion VND, most of which will be used to pay off debt (Photo TL)

It can be seen that a significant portion of the collected capital, up to VND 756.4 billion, was used by Becamex IJC to pay off debt, showing a shortage of capital for operations at the present time. However, the company is still planning to buy more shares and increase ownership in another related unit.

Specifically, Becamex IJC has approved a plan to buy 55.5 million shares of Becamex - Binh Phuoc Infrastructure Development Joint Stock Company to increase its ownership ratio from 0% to 31.7% of charter capital. The amount that Becamex IJC needs to buy shares will be 666 billion VND and the entire amount will be paid in 2023.

Revenue dropped 36%, costs did not decrease but increased

It is not difficult to understand that Becamex IJC has to come up with a plan to issue shares to increase capital, using hundreds of billions of VND from this capital source to pay off debt because the unit's revenue has continuously decreased over the past year. Even the profits earned in the first quarter of this year are not enough to cover the expenses, leading to a serious negative in business cash flow.

Specifically, Becamex IJC's revenue has continuously decreased from 710 billion VND in the second quarter of 2022 to only 214 billion VND in the fourth quarter of 2022. Entering the first quarter of 2023, revenue recovered to 337 billion VND, profit after tax reached 108 billion VND.

Although there has been a recovery, compared to the same period, Becamex IJC's revenue is down 36%. The company's after-tax profit is also down 38% compared to the first quarter of 2022.

In the first quarter business performance report, it can be seen that although revenue decreased, Becamex IJC's selling expenses remained high, accounting for nearly 10 billion VND and not much reduced compared to the same period. Even the business management expenses increased from nearly 14 billion to 15 billion VND despite the revenue decreasing by 36%.

Thus, even though the first quarter business results have grown compared to the most recent quarters, this still cannot be considered a positive result for Becamex IJC.

Profit is not enough to cover expenses, business cash flow is heavily negative

By the end of the first quarter of 2023, Becamex IJC's total assets reached VND6,361 billion, a slight decrease compared to the beginning of the year. In which, the cash and cash equivalents index decreased sharply from over VND226 billion to only VND111 billion.

Inventory still accounts for a large proportion of the asset structure with VND 3,493 billion. Most of which has been recorded as unfinished production and business costs at projects implemented by Becamex IJC.

Becamex IJC's capital structure currently records short-term financial debt of about VND507 billion, long-term financial loans and leases of VND405 billion. The loans have not changed much compared to the beginning of the year. However, the accumulated undistributed profit after tax has decreased from VND958 billion to only VND719 billion.

Another notable point is that Becamex IJC's net cash flow from operating activities is negative by VND 17 billion. Specifically, in the first quarter, the company brought in VND 164 billion in profit from operating activities before changes in working capital. However, the amount of money spent during the period was too large, especially in the increase and decrease of payables, up to VND 161 billion and the amount of interest paid was up to VND 33 billion. This caused Becamex IJC's operating cash flow to be negative by VND 17 billion in the first quarter of 2023.

Source: https://www.congluan.vn/huy-dong-them-nghin-ty-dong-tu-co-dong-becamex-ijc-mang-756-ty-di-tra-no-post249526.html