Hoa Phat Group (HPG) Q4 2021 earnings summary

Executive summary

• Record FY2021 revenue reached VND 150.865T and net profit after tax VND 34.521T, up 65% and 156% YoY; results exceeded plan by 26% and 92%, respectively.

• Steel remained the core business, contributing 94% of revenue and 96% of profit after tax; exports represented 33% of revenue.

• Operations expanded across five business lines, while major steel, container, real estate and home-appliance investments set the growth agenda.

Financial highlights

• Revenue from goods and services was VND 150.865T; net revenue VND 149.680T, up from VND 91.279T and VND 90.119T in 2020.

• Gross profit was VND 41.108T vs VND 18.904T; operating profit VND 37.008T vs VND 15.292T; profit before tax VND 37.057T vs VND 15.357T.

• Net profit after tax was VND 34.521T vs VND 13.506T; profit attributable to parent shareholders was VND 34.478T; basic EPS was VND 7,166 vs VND 2,728 restated.

• EBITDA reached VND 45.665T, up 99% YoY; reported EBITDA margin was 30%.

• Operating cash flow rose to VND 26.721T from VND 11.587T; ending cash and cash equivalents reached VND 22.471T.

Outlook and guidance

• FY2022 revenue was expected to increase slightly YoY, supported by Dung Quat output, containers and home appliances; higher fuel prices, volatile selling prices and financing costs were cited as headwinds.

• Dung Quat Steel Complex No. 2: VND 85T investment, 5.6M tonnes annual HRC capacity; construction planned for Q1 2022 and operation targeted by end-2024.

• The container factory's 200,000-TEU first phase was slated for trial operation in Q3 2022 and initial product launch in Q4 2022.

• Real estate revenue target exceeded VND 1.6T for 2022, including VND 1.5T from industrial-park infrastructure leasing.

• 2025 steel output target was 14M tonnes, including 8.6M tonnes of HRC, following completion of Complex No. 2.