Hoa Phat invests nearly VND43 trillion on Dung Quat project

Tuesday, Jul 30, 2019 15:06

A view of Hoa Phat Dung Quat iron and steel production complex. — Photo courtesy of Hoa Phat

In the first half of 2019, Hoa Phat Group poured nearly VND9.17 trillion (US$393.35 million) into Dung Quat iron and steel production complex, raising total investment in the project to approximately VND42.92 trillion.

The group’s chairman Tran Dinh Long said that total initial investment for the project is VND40 trillion of medium-term loans for fixed assets and VND12 trillion for short-term activities.

During the investment process, Hoa Phat applied some new technological achievements, increased investment in environmental protection and purchased European equipment to raise capacity, therefore, its spending on fixed assets increased to VND50 trillion and for working capital of VND15 trillion.

From January to June, Hoa Phat recorded more than VND30.06 trillion of revenue, a year-on-year increase of 10 per cent.

However, the parent company’s after-tax profit decreased by 13 per cent to nearly VND3.84 trillion, fulfilling 58 per cent of the year's target.

According to information from a recent analyst meeting, the price of iron ore is at $125 per tonne, up 80 per cent compared to the beginning of the year. The main reason is due to problems at ore mines in Brazil, causing supply to narrow. This affected the business results of Hoa Phat Group.

However, Long said the company has already purchased raw materials at the old price, recorded on a monthly average, thus limiting the impact of the price increase in the first half of the year.

He said that in the second half of 2019, the situation may be difficult when real estate project procedures are delayed. — VNS

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