VEAM firmly overcomes difficulties

11:40 | 02/07/2019 Companies

On June 30, the Vietnam Engine and Agricultural Machinery Corporation – JSC (VEAM) held the 2019 annual General Shareholders Meeting in Hanoi.  

Acting General Director Ngo Van Tuyen speaks at the meeting

Profit and dividend payout ratio increase

Speaking at the event, Acting General Director Ngo Van Tuyen reported that VEAM’s business results in 2018 recorded a consolidated revenue of over VND7,000 billion; post-tax profit of nearly 7,050 billion. However, 90% of its profits (more than VND6,850 billion) were earned from capital contributions to joint ventures rather than from its main production activities. VEAM currently has more than VND11 trillion of cash in banks, of which nearly half are 2018 dividends to be paid to shareholders.

At the meeting, VEAM’s Board of Directors submitted to shareholders to bring more than 1.3 billion shares of VEAM (code: VEA) to be listed on the Ho Chi Minh City Stock Exchange (HOSE) in 2019. Currently, the VEA shares are trading on the UpCom with a closing price on Friday (June 28) at VND 57,800 a share, doubled the IPO price last year, at VND 27,600.

In 2018, the parent company’s financial revenue reached VND5,495 billion a 7% increase compared with the plan (VND 5,137). However, the revenue from sales and services was only VND2,927 billion equivalent to 82% of the plan (VND 3,539 billion); post-tax profit reached VND5,224 billion, exceeding 6.44% of the plan (VND4,908 billion), dividend payout ratio up 38.71% as planned. The profits and increased dividend payout ratio brought joy and excitement to investors and shareholders.

Shareholders cast their votes at the meeting

The above positive results were attributed to good business performances of companies which VEAM has capital contributions in such as Futu1, Fomeco, Disoco.

Besides, the efficiency of short-term financial investment of the parent company in the second half of 2018 improved significantly by optimizing financial resources; and reducing unnecessary and ineffective costs.

Ngo Van Tuyen also acknowledged that the agricultural machinery and automobile manufacturing sectors continued to face difficulties. The main reasons were that consumptions of VEAM’s automobile products using Euro 2 emission standards did not meet the plan while the new products of Euro 4 emission standards have not yet entered the market. The VEAM automobile factory in Thanh Hoa province has about 3,000 unsold units worth over VND1,000 billion.

“Therefore, in 2019 the factory targets to consume at maximum 2,400 units of Euro 2 emission standards. The production and business plan of the factory has been issued by the Board of Directors since the beginning of the year, and will be implemented after this shareholders' meeting”- he said.

Focusing on solutions to achieve high growth

Regarding business plan for 2019, the parent company VEAM aims to earn post-tax profit of more than VND 6,400 billion, up 23% against 2018; financial revenue of over VND7,240 billion. In 2019, the support industry sector is forecast to see a high growth while the engine and agricultural machinery sector continues to be in difficulties when the parent company has not yet created breakthrough plans.

VEAM’s Chairman of the Board of Directors Bui Quang Chuyen addresses the meeting

Speaking about the roles of the Board of Directors, VEAM’s Chairman of the Board of Directors Bui Quang Chuyen said in 2018 the Board implemented a number of tasks including: issuing internal regulations, setting up new departments for management and operation of the Corporation; supervising the implementation of resolutions and decisions of the Board; and supervising its branches and affiliated companies... “In 2019, the Board will keep close watch on production and business activities, cooperate with prestige enterprises and brands, improve efficiency on capital and asset management, and tighten supervision works.”, he said.

Regarding the divestment following the governmental Decision No. 1232/QD-TTg dated August 17, 2017 Mr. Bui Quang Chuyen informed that VEAM’s State capital rate is subjected to reduce by 52.47% to 36% and the divestment process is late for nearly 2 years. He said “the Corporation’s board has sent a report to the Ministry of Industry and Trade, but there are needs some points still to be clarified and then will be fully informed to shareholders when approved by competent authorities.

Acting General Director Ngo Van Tuyen talks with the press

At the meeting, the VEAM’s Board of Directors voted to adopt the dismissal of the member of the Board title with Mr. Tran Ngoc Ha, who was dismissed from the CEO in March 2019. Thus, after the vote, Mr. Tran Ngoc Ha is no longer a member of VEAM Board of Directors.

The Board of Directors has elected an independent member for the 2017-2022 term and the nominated candidate is Mr. Nguyen Tien Vy, former Director of the Legal Department under the Ministry of Industry, former Chief of the Ministry of Industry and Trade’s Office, who received 98.55% of the votes to attend the shareholder’s meeting.

According to reports by the Board of Directors, the financial revenue in 2019 is expected at a relatively high

level thanks to profits and dividends from long-term investments in 2018. The dividend payout ratio is

expected to be high, over 39%, up 11% compared with last year.

Thuy Linh - Lan Anh