Giant steel maker Hoa Sen Group suffered a record loss of VND886 billion (US$35.7 million) in the fourth quarter of the fiscal year 2021-2022, starting from October 1, 2021 to September 30, 2022.

In the period, the group recorded revenue of VND7.9 trillion, down by half compared to VND15.7 trillion recorded in the same period last year.

Doing business below cost made the company's gross profit total negative VND230 billion, while in the same period last year this figure was VND2.47 trillion.

After deducting expenses, Hoa Sen reported an after-tax loss of more than VND886 billion. This was also the largest loss the business ever reported.

Explaining the third quarter business results, Hoa Sen said that the main reason was the continuous decrease in steel prices together with slow consumption demand, leading to a sharp decline in gross profit margin.

In the whole fiscal year 2021-2022 (from October 1, 2021 to September 30, 2022), Hoa Sen reported revenue of VND49.7 trillion, completing 107 per cent of the yearly plan but net profit was only VND251 billion, down 94 per cent.

Hoa Sen Group said that although the business plan for the fiscal year 2021-2022 was carefully built, the unforeseen fluctuations mentioned above made the business unable to complete the profit plan.

As of September 30, 2022, Hoa Sen's total assets decreased by 36 per cent compared to the beginning of the year at VND17.02 trillion. In which, inventory reached VND7.37 trillion, accounting for 43.3 per cent of total assets; fixed assets reached VND5.96 trillion, accounting for 35 per cent of total assets.

In the Vietnamese market, steel prices continuously fell while demand was slow, inventories could not be reduced immediately, leading to losses for businesses in the fourth quarter of 2022. — VNS