Struggling with debt from real estate giant, steel company makes unexpected turn

The steel giant is constantly struggling but is still in trouble after many years of struggling because of the real estate market and bad debts from real estate giants.

From loss of several hundred billion to profit

SMC Investment and Trading Joint Stock Company (HoSE: SMC) has just announced the Resolution of the 2025 Annual General Meeting of Shareholders (AGM), taking place on May 22, with many important contents. Among them, the approval of the audited financial report with a profit of nearly VND 12.1 billion in 2024 compared to a loss of nearly VND 287 billion in the self-prepared report.

With this result, SMC has returned to profit after 2 years of heavy losses. In 2023, SMC lost more than 925 billion VND, and in 2022, it lost nearly 652 billion VND.

Previously, on April 10, SMC shares of SMC Investment and Trading JSC were put on warning list by Ho Chi Minh City Stock Exchange (HoSE) and monitored because the company was 15 days late in submitting the 2024 Audited Financial Report and especially recorded the parent company's after-tax profit loss in the last two years (2022 and 2023).

SMC still has large accumulated losses despite huge profits in 2020-2021. Source: SMC

According to HoSE regulations, businesses reporting losses for three consecutive years will have their shares delisted.

The reason why SMC's business results changed from a loss of several hundred billion to a profit, according to the explanation, is because this enterprise has liquidated a number of assets and adjusted the provision for receivables as of December 31, 2024 related to sales contracts and agreements that have been implemented and occurred after the fiscal year to ensure customers' payment obligations.

According to the audited consolidated financial statements for 2024, SMC has adjusted down the value of the provision for short-term doubtful receivables from more than VND 663 billion in the self-prepared report to VND 351 billion, a decrease of 47%.

Also at the 2025 Annual General Meeting of Shareholders, the Presidium asked for opinions on canceling the proposal to issue individual shares to professional securities investors to increase charter capital. The reason is said to be that the timing is not favorable.

In addition, SMC added a proposal to elect two members of the board of directors.

SMC cancels the proposal to issue private shares to professional securities investors to increase charter capital.

In mid-May, this leading steel trading giant announced a plan to privately offer 73 million shares at VND10,000 in 2025-2026 to increase its charter capital by about 2 times.

According to the consolidated financial report for the first quarter of 2025, SMC recorded revenue of about VND 1,846 billion, down 17% over the same period. Profit after tax was VND 127 million.

There are many difficulties

SMC Investment and Trading JSC has been facing difficulties since 2022 due to the sharp decline in steel prices and the sluggish real estate market. Enterprises are also having difficulty recovering debts, especially related to bad debts of construction companies, and real estate investors are facing liquidity difficulties.

As of March 31, 2025, SMC still had an accumulated loss of nearly VND 137.7 billion (compared to an accumulated loss of nearly VND 140 billion at the end of 2024), equal to 18.7% of charter capital.

SMC Investment and Trade used to be the leading steel trading enterprise in Vietnam with revenue of more than VND 21,000 billion in 2021 and nearly VND 23,200 billion in 2022, decreasing to VND 8,931 billion in 2024.

SMC's profits also decreased sharply, from a profit of more than VND 900 billion in 2021 to a loss in 2022 and 2023 as mentioned above.

The main reason for SMC's losses is the need to set aside large provisions for bad debts, especially from real estate businesses.

By the end of 2024, SMC recorded short-term receivables from customers of more than VND 1,773 billion.

Of which, Delta - Valley Binh Thuan Company Limited owes nearly 441 billion VND (SMC reserves more than 125 billion VND, in early 2024 reserves nearly 180 billion VND); Dalat Valley Real Estate Company Limited owes more than 169 billion VND (SMC reserves nearly 1.5 billion VND, in early 2024 reserves nearly 66 billion VND); The Forest City Company Limited owes 131.5 billion VND (SMC reserves more than 182 million VND, in early 2024 reserves more than 52.6 billion VND)...

3 businesses in the ecosystem of Novaland (NVL) chaired by Mr. Bui Thanh Nhon owe SMC a large amount of money. Source: Financial statements

These are 3 businesses in the ecosystem of Novaland (NVL) chaired by Mr. Bui Thanh Nhon. Novaland has been facing liquidity difficulties for many years. Mr. Bui Thanh Nhon has returned as chairman and restructured the business, but the debt burden is still very large.

Previously, at the 2024 Annual General Meeting of Shareholders, SMC leaders affirmed that they would resolutely collect the debt of Novaland - one of SMC's major customers in the construction steel distribution sector.

SMC's total liabilities at the end of 2024 were over VND3,968 billion, 4.9 times higher than equity, of which short-term debt was over VND2,173 billion and long-term debt was over VND217 billion. Despite recording profits in 2024, SMC's main business cash flow was still heavily negative.

In the past few years, SMC Steel's board of directors has not received remuneration due to business difficulties.

In 2025, SMC Investment and Trade plans to have revenue of VND 9,500 billion, an increase of 6.4% compared to 2024, and an expected after-tax profit of VND 30 billion, an increase of 148% compared to the actual performance in 2024. Of which, the total expected consumption output is 620,000 tons, a slight increase of 3.8% compared to the same period last year.

SMC shares fell sharply from VND20,000/share in July 2024 to VND6,000/share in February 2025. Recently, SMC rose back above VND10,000/share.

Violating the commitment to bond buyers, what will happen to the famous 'tycoon'? Thanh Thanh Cong Investment Joint Stock Company - the core enterprise in the TTC Group ecosystem, has violated the commitment conditions to bondholders for 2 bonds worth 350 billion VND, which may affect the rights of bondholders.

Source: https://vietnamnet.vn/lao-dao-vi-khoan-no-cua-dai-gia-bat-dong-san-dn-thep-xoay-so-bat-ngo-2404424.html