Seafood processors Hung Vuong JSC (HVG) has reported its post-tax profits gained VND9 billion (US$387,000) to VND16 billion for the financial year.

This amount is for the period starting on October 1, 2017 and ending on September 30, 2018, after the firm’s financial report was audited.

The company recorded a loss of VND705 billion in the financial year 2016-17.

The company earned big from selling its assets. In November 2017, HVG collected VND486.8 billion from selling its 54.3 per cent stake at Sao Ta Foods JSC.

In July 2018 last year, the company offloaded its 57.2 per cent stake in Viet Thang Feed JSC to earn VND861 billion. In September 2018, the firm earned VND151 billion from selling one of its cold stores.

But total revenue in the financial year 2017-18 dropped 47.6 per cent year on year to VND8.23 trillion as its business activities saw a steep decline.Export revenue fell to VND3.3 trillion from VND7.4 trillion.

Another factor that keeps weighing on the future prospects of the seafood business is the firm’s short-term liabilities owed to the Joint Stock Commercial Bank for Foreign Trade (Vietcombank) and the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV). The loans are still to be paid back.

According to Hung Vuong JSC’s audited financial statement, the company borrowed a total VND2.76 trillion ($119 million) from the two banks in July 2018 and October 2017. The loans are due in March, June and August 2019.

Of the total borrowings, current portions of short-term liabilities were VND52.5 billion for BIDV and VND554.2 billion for Vietcombank as of September 30, 2018.

The seafood processing firm had asked Vietcombank to extend the due date for the short-term liabilities to the next eight years, Hung Vuong JSC said in its audited financial statement.

HVG also made loans from other commercial banks such as Vietinbank, HDBank and Agribank. The borrowings are due before June 2019.

The company mortgaged its land use licences to those banks as parts of the borrowing contracts.

According to Ernst & Young Vietnam, the short-term liabilities raised the doubts about the consistent operation of the seafood business.

“The future business condition of Hung Vuong JSC depends on how the management board re-allocates the cash flow, make it profitable in coming financial years and re-structure the amount of bank loans.”

The company is listing 227 million shares on the Ho Chi Minh Stock Exchange with code HVG. Its shares has plunged 7.4 per cent in the last two sessions after gaining a quarter in four trading days to VND5,500 per share on Wednesday. — VNS