The total debt of giant steelmaker Hoa Sen Group has doubled since the beginning of this year due to a sudden increase in the demand for working capital.

According to the group’s consolidated financial statement released recently, total debt at the end of the year reached nearly VND16.3 trillion (US$715 million), of which short-term debt accounts for more than 82.5 per cent. The rest was long-term bank loans used for the purpose of construction and purchasing fixed assets.

Within the first three months of 2018, Hoa Sen must pay some VND900 billion out of VND8,500 billion in short-term bank loans, owed to Asia Commercial Bank, Vietcombank and Standard Chartered Bank.

The group’s sales and services operation helped Hoa Sen earn approximately VND26.1 trillion, an increase of 46 per cent year-on-year. Financial income was more than VND56 billion, which was still not enough to cover financial expenses of VND589 billion, including interest expenses of VND482 billion.

The group’s net profit decreased 11 per cent, standing at VND1.3 billion, equivalent to just over 80 per cent of the company’s plan set in the annual shareholders’ meeting this year. — VNS