Hoa Phat invests nearly 43 trillion VND in Dung Quat project

10:11 | 15/08/2019 Economy

In the first half of 2019, Hoa Phat Group poured nearly 9.17 trillion VND (393.35 million USD) into Dung Quat iron and steel production complex, raising total investment in the project to approximately 42.92 trillion VND.

A view of Hoa Phat Dung Quat iron and steel production complex - Photo courtesy of Hoa Phat

The group’s chairman Tran Dinh Long said that total initial investment for the project is 40 trillion VND of medium-term loans for fixed assets and 12 trillion VND for short-term activities.

During the investment process, Hoa Phat applied some new technological achievements, increased investment in environmental protection and purchased European equipment to raise capacity, therefore, its spending on fixed assets increased to 50 trillion VND and for working capital of 15 trillion VND.

From January to June, Hoa Phat recorded more than 30.06 trillion VND of revenue, a year-on-year increase of 10 percent.

However, the parent company’s after-tax profit decreased by 13 percent to nearly 3.84 trillion VND, fulfilling 58 percent of the year's target.

According to information from a recent analyst meeting, the price of iron ore is at 125 USD per tonne, up 80 percent compared to the beginning of the year. The main reason is due to problems at ore mines in Brazil, causing supply to narrow. This affected the business results of Hoa Phat Group.

However, Long said the company has already purchased raw materials at the old price, recorded on a monthly average, thus limiting the impact of the price increase in the first half of the year.

He said that in the second half of 2019, the situation may be difficult when real estate project procedures are delayed.