Loc Troi Group (LTG) has just been fined 6 billion VND, profit mainly from investment in Loc Nhan

Loc Troi Group (LTG) issues 20.1 million shares to pay dividends

Loc Troi Group Corporation (LTG) plans to close the list of shareholders receiving stock dividends on October 24, 2023. The dividend payout ratio is 25%, equivalent to each shareholder owning 100 shares will receive 25 newly issued shares.

With 80.5 million shares currently in circulation, Loc Troi Group is expected to issue an additional 20.1 million shares to pay dividends, equivalent to a par value of VND 201.48 billion. The source of capital for issuance is from undistributed after-tax profits on the audited financial statements as of December 31, 2022.

Loc Troi Group LTG was just fined 6 billion dong mainly due to investment in human resource 1. — Loc Troi Group (LTG) was fined and had to pay back taxes of more than 6 billion VND, debt increased, and profits mainly came from investment in Loc Nhan (Photo TL)

Regarding the performance of LTG shares, since the beginning of May, this stock code has increased from VND 27,700/share in the session on May 5, 2023 to VND 38,600/share on October 16, 2023. This increase is equivalent to a rate of 39.3% in just 5 short months.

This is considered a consequence of the high export price of rice, which has benefited rice exporting enterprises. In addition, Loc Troi Group also achieved high revenue in the second quarter thanks to financial revenue, offsetting the loss from business activities in the first quarter.

Second quarter profit increased sharply thanks to financial revenue

In the second quarter of 2023, LTG achieved revenue of VND 3,678 billion, profit after tax increased to a record level of VND 424.7 billion while in the same period last year it recorded a loss of VND 44.3 billion. The business results of the second quarter brought the accumulated profit for the first 6 months of the year to VND 357.8 billion, an increase of 88.1%.

In fact, LTG's profit growth did not come from its core business. Q2 revenue only increased slightly by 3.7% year-on-year. Cost of goods sold was VND3,151.7 billion, gross profit was VND526.3 billion.

Financial revenue in the period increased 9 times, from 5.9 billion to 49.4 billion VND. However, financial expenses in the period also doubled from 114.6 billion to 231.4 billion VND.

The biggest increase was in interest expense, which increased from VND53.9 billion to VND168.4 billion. It can be seen that in the second quarter alone, LTG's interest expense increased 3 times compared to the same period last year. Business management expenses and sales expenses were recorded at VND128.4 billion and VND135.8 billion, respectively.

The most dramatic change in LTG's Q2 financial statements came from the recording of profits (losses) in associated companies, amounting to VND326.9 billion. This sudden revenue helped push LTG's profits to an unusually high level.

This is the profit from investing in two affiliated companies: Loc Troi Quang Dong and Loc Nhan. Specifically, Luong Thuc Loc Nhan has an investment value of 184.9 billion and Loc Troi Quang Dong invested 3.4 billion VND. The profit mainly comes from the investment in Loc Nhan, which is determined to be up to 326.9 billion VND while Loc Troi Quang Dong is negative 3.4 billion VND.

Notably, the gain from the investment in Loc Nhan is provisionally determined based on the book value of the company's net assets at the acquisition date. Therefore, the group will make the necessary adjustments (if any) upon completing the official assessment of the fair value of the acquired net assets within 12 months from the acquisition date.

In other words, the recorded profit of VND 326.9 billion that Loc Troi recorded from the purchase and sale of shares at Loc Nhan may still be an inaccurate figure.

Loc Troi was fined 6 billion VND, short-term debt increased 3,100 billion VND

By the end of the second quarter, Loc Troi's total capital was VND12,183.5 billion, an increase of 39.5% compared to the beginning of the year. The increase mainly came from debt. Of which, short-term debt nearly doubled, from VND3,747.8 billion to VND6,869.8 billion. Thus, LTG's short-term debt increased by VND3,100 billion in the first half of 2023 alone.

Loc Troi Group's net cash flow from operating activities was also negative VND3,310.8 billion. In the same period last year, cash flow from operating activities was also negative VND1,816.7 billion. This is a sign of the imbalance in the company's cash flow.

In addition, Loc Troi Group has just been sanctioned by the General Department of Taxation for tax administrative violations in 2021 and 2022. The total amount of fines and arrears is more than 6 billion VND.

Of which, the company was fined 1 billion VND, VAT was collected 666 million VND, corporate income tax was collected 3.9 billion VND, personal income tax was collected 29.8 billion VND. LTG was fined 434.5 million VND for late tax payment.

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