Century Fiber (STK) profits plummet, debt 'pours into' UNITEX factory

Century Fiber (STK) offers 13.5 million individual shares

The Board of Directors of Century Fiber Corporation (Stock code: STK) has just approved a plan to offer 13.5 million individual shares to professional securities investors at a par value of VND10,000/share. The lowest offering price is VND18,300/share and the highest is VND60,000/share. Thus, the estimated amount of money collected from the offering will be from VND247 billion to VND810 billion. The company will approve the final offering price after the plan is approved by the State Securities Commission.

soi the ky stk profit lao do tang cuong loan it do to nha nha unitex hinh 1 — The number of orders decreased, the profit in the first 9 months of 2023 of Century Fiber Corporation (STK) continued to plummet

In the list of professional securities investors participating in the private share purchase this time, there are 4 individuals, including 2 senior leaders of Century Fiber. Including: Mr. Dang Trieu Hoa, General Director, Vice Chairman of the Board of Directors, was distributed 5.5 million shares; Ms. Dang My Linh, Chairman of the Board of Directors, was distributed 7 million shares; Mr. Nguyen Thai Hung and Phan Gia Dung were distributed 100,000 and 900,000 shares respectively.

After the above transaction, it is estimated that the share ownership ratio of the above 4 individuals will change as follows: Mr. Dang Trieu Hoa holds 17.2% of charter capital; Ms. Dang My Linh holds 19.1% of charter capital; Mr. Nguyen Thai Hung holds 1.5% of charter capital; Mr. Phan Gia Dung holds 3.5% of charter capital.

Regarding the proceeds from this offering, it is expected that Century Fiber will use 73% of the capital to lend to UNITEX Fiber, Textile and Dyeing Company Limited (a subsidiary of STK). The remaining 27% of the capital will be used by STK to purchase raw materials.

On the market, at the trading session on November 10, 2023, STK shares are priced at VND 27,550/share. At this price, it is estimated that the amount STK can collect when offering 13.5 million shares is approximately VND 372 billion.

Third quarter profit plunged 67%, only completing 22% of 2023 plan

In the third quarter of 2023, Century Fiber's net revenue reached VND377.6 billion. Cost of goods sold accounted for VND321.8 billion, causing Century Fiber's gross profit to only reach VND55.8 billion, down 38.6% over the same period. Gross profit margin decreased from 17.6% to only 14.8%.

Financial revenue increased 4 times, to 7.1 billion VND, but in return, Century Fiber's financial expenses also increased sharply from 16 billion to 23.2 billion VND. Of which, interest expenses increased 1.8 times to 4.8 billion VND.

The total selling expenses and administrative expenses of Century Fiber did not fluctuate much, accounting for 6.9 billion and 15 billion VND respectively. The net profit from Century Fiber's business activities reached 17.9 billion, down 68% compared to the same period.

After deducting corporate income tax expenses, STK's after-tax profit reached 16.6 billion, down 67%.

The accumulated revenue of Century Fiber in the first 9 months of the year reached 1,072.8 billion VND, down 36.3%. The accumulated profit after tax reached 55.7 billion VND, down 71.8%. Compared to the 2023 target, Century Fiber has only completed nearly 50% of the revenue plan and 22% of the annual profit plan.

Century Fiber increases debt of thousands of billions "poured into" the UNITEX project

In the context of declining business results and decreasing orders, Century Fiber is still having to increase capital mobilization activities for the UNITEX project.

The UNITEX Factory Project has an expected capacity of 60,000 tons of fiber/year and will be operational in the first quarter of 2024. The goal of building the factory is to produce high-quality fiber products, recycled fibers...

In March 2023, Century Fiber announced that UNITEX Yarn, Weaving, Dyeing Company Limited successfully signed a syndicated loan with a total value of 52.5 million USD, equivalent to 1,233 billion VND. The loan has a term of 57 months, with CTBC Bank and Kasikorn Bank as the main credit guarantee arrangers. Shanghai Commercial and Savings Bank (Offshore Banking Branch) and Entie Commercial Bank are the credit arrangers and E.SUN Commercial Bank is the credit arranger.

At the same time, in the Q3/2023 financial statements, Century Fiber also recorded a new long-term debt of VND 165.2 billion. This loan is from CTBC Bank with a principal repayment period from September 30, 2024 to December 30, 2024. The explanation for this loan is also to supplement capital for the Unitex project.

If we include the private offering of 13.5 million shares mentioned in the article, with 73% of the capital for UNITEX Yarn, Weaving, Dyeing Company Limited, it can be seen that Century Fiber is having a large resource for this project.

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