In its first quarter consolidated financial report, FLC has to set aside a provision of VND220 billion ($9.6 million) for the investment of VND261 billion ($11.35 million) in H.A.I as the stock has been plummeting.
In the last four months of 2017, FLC was strongly buying the stocks of H.A.I. Agrochem JSC. So far, FLC has invested VND261 billion ($11.35 million) in H.A.I. by buying 23 million H.A.I. shares, accounting for 12.65 per cent, and is the company's largest shareholder. However, FLC also has to set aside a provision of VND220 billion ($9.6 million), which reduced the value of its investment in H.A.I to only VND41 billion ($1.78 million).
Since FLC bought H.A.I stock at the end of 2017, the price plunged from the peak of VND22,000 ($0.96) to VND7,000 ($0.34) per share and has been below VND5,000 ($0.22) ever since February 2018. The stock ended the session on May 2 at only VND1,670 ($0.07). This continuous plunge forced FLC to set aside sizeable provisions.
The firm's financial statement also reported total short-term and long-term loans of VND5.2 trillion ($227.22 million).
Recently, on April 12, FLC announced Resolution No.45/2019/NQ-HDQT-FLC on issuing nearly 300 million shares at the unit price of VND10,000 ($0.43). At the end of May 2, the FLC stock was only at VND4,810 ($0.21) per share.
The financial report also showed that the net revenue of FLC in the first quarter reached VND2.98 trillion ($129.56 million), an increase of 35 per cent compared to 2018. However, after-tax profit was only VND8 billion ($347,826), down 92 per cent, because the cost of sales increased sharply.