Posted on 22 Jul 2015
The Hoa Phat Group has posted consol-idated revenue of more than VND13.6 trillion (more than US$623.4 million) for the first half of this year.
It earned a consolidated profit of more than VND1.9 trillion (more than $87.09 million) during the same period.
It has thus achieved 61 per cent and 83 per cent of its revenue and profit targets, respectively, for the year.
Sales of the group's two major products, construction steel and steel pipes, contributed the most to its H1 growth.
According to the group's report, it sold 675,000 tonnes of construction steel, seeing a 52 per cent year-on-year increase. It controlled 22.1 per cent of the steel market in the first half of the year.
Meanwhile, 196,000 tonnes of steel pipes were sold in the first six months of 2015, which is a 44 per cent year-on-year increase. This helped the group consolidate its top position in the country, with a market share of nearly 22 per cent.
In the second quarter of 2015, it earned quarterly revenue of more than VND7.7 trillion (nearly $353 million) and more than VND1.25 trillion ($57.45 million) in profit, an increase of 15 per cent and 30 per cent, respectively, over the same period last year.
The group's real estate business also showed positive signs. Some 20 per cent and 42 per cent, respectively, of the Pho Noi A and Hoa Mac Industrial Zones in Hung Yen and Ha Nam Provinces have been rented by local and international firms. In addition, most of the apartments in its Mandarin Garden residential project in Ha Noi have been sold.
Hoa Phat is currently constructing basements in an office and apartment complex in Ha Noi. The project, involving an investment of VND1.5 trillion (nearly $69 million), consists of four buildings with more than 600 offices and apartments which are expected to go on sale in 2016.
Speaking during a meeting with investors on Thursday, Hoa Phat Group Chairman Tran Dinh Long said the business results were achieved due to the group's strong financial condition and low total debt-to-asset ratio of 28 per cent.
Asked about the progress of some major projects the firm is investing in, Long said VND3.8 trillion ($174.2 million) would be invested in the third phase in the Hoa Phat integrated steel complex in Hai Duong Province, which would have a capacity of 750,000 tonnes per year. The construction was expected to be completed in September 2015, and the blast furnaces would become operational by the end of this year, he said.
The firm has imported most of its raw materials because the Thach Khe iron ore mine in Ha Tinh Province has not become operational.
"The proportion of imports of ore depends on the Thach Khe iron ore mine. If the mine begins operations, the rate of ore imports will be low; if not, the import ratio will increase to 80 per cent," Long said.
The group has also implemented a plan to develop its cattle feed business. It has invested in a food processing factory in Pho Noi A Industrial Zone with a capacity of 300,000 tonnes per year. The factory is expected to begin operations in the first quarter of 2016.
Investors and securities firms are struggling with two taxes the Government imposes on their bonus shares, Dau tu chung khoan (Securities Investment) newspaper reported earlier this week.
Investors are the ones being directly affected by the tax policies. Under the Law on Individual Incomes, shareholders have to pay two taxes for their bonus shares. One of the two is equal to 5 per cent of the share value when investors receive bonus shares as dividends, and the other is 0.1 per cent of the total trading value when those shares are sold.
These taxes reduce investors' benefits or profits, and they could lead to unfairness between securities firms, as some of them only collect taxes from their clients' trading activities.
At the moment, shareholders have two problems. First, they still have to pay taxes, even when they suffer losses from trading shares. Second, receiving bonus shares for dividends will cost shareholders more in taxes than receiving cash for dividends if they exchange bonus shares for cash.
Investors said they should be charged one tax instead of two when they received bonus shares for dividends, and the Government should not impose taxes on them when they sell bonus shares on the market.
They said removing a tax would help reduce the gap between securities investment and other sectors in which investors pay less or no taxes for their activity, including the banking sector.
On the other hand, securities firms have to deal with more challenging problems – they have to deal with both clients and Government agencies.
According to the General Department of Taxation, a company doesn't have to collect taxes from bonus shares when they pay them to shareholders as dividends. But the company must collect two taxes from investors when they sell their bonus shares.
The problem for securities companies arises when investors don't accept that they have to pay two taxes on a single transaction.
Investors also question their brokers, accusing them of too strictly following the rules while other brokerage firms skirt them, making their investors pay only one of the taxes.
Thus, those firms that follow the rules are facing complaints from their clients, who feel they're getting fewer benefits.
Nhu Dinh Hoa, director general of Bao Viet Securities Joint Stock Company (BVSC), said the securities market could decrease, making such tax policies discouraging for investors and securities firms.
He said listed companies had already paid individual income taxes when they paid dividends to shareholders. This meant it was unreasonable to collect more taxes from shareholders' bonus shares.
If companies paid bonus shares from their capital surplus, which is created when the company issues shares at higher than face value, investors wouldn't have to pay taxes for those bonus shares because the company only returned the initial investment to shareholders, he said.
If the securities firms could not distinguish bonus shares from initial shares, they would be unable to collect taxes from trading activities between investors, Hoa said. In addition, investors could avoid paying taxes by changing their accounts from one brokerage firm to another after receiving bonus shares.
