Hoa Phat Group (HPG) Q4 2022 earnings summary

Executive summary

• FY22 revenue was VND 142,771bn, down 5% YoY; net profit was VND 8,444bn, down 76% and 34% of plan, amid weak steel demand, lower prices and high input costs.

• Steel remained the core business, representing 94% of revenue and 95% of net profit; total steel sales reached 7.2mn tons.

Financial highlights

• Net revenue was VND 141,409bn vs. VND 149,680bn in FY21; gross profit fell to VND 16,763bn from VND 41,108bn.

• Net profit after tax was VND 8,444bn vs. VND 34,521bn; parent-attributable profit was VND 8,484bn vs. VND 34,478bn.

• EBITDA was VND 23,722bn, down 49% YoY; it declined through the year and was negative in the final quarters as weak demand, lower prices and high raw-material costs weighed on results.

• Operating cash flow was VND 12,278bn vs. VND 26,721bn; investing cash outflow was VND 24,626bn and year-end cash and equivalents were VND 8,325bn.

Outlook and guidance

• FY23 targets: revenue of VND 150,000bn and after-tax profit of VND 8,000bn; revenue was expected to increase slightly YoY, with market conditions remaining difficult, especially in H1.

• Priorities include flexible steel output and inventory control, raw-material price monitoring, safe debt and cash-flow management, and completing legal procedures for Dung Quat Steel Complex No. 2.

• Container Factory phase 1 was expected to begin trial operations and launch products in 2023; the VND 85,000bn Dung Quat No. 2 project was targeted for operation by 2025.