From October 2021, after restructuring the organizational structure, Vietnam Southern Food Corporation – Joint Stock Company recovered lost profit, the return is many times higher compared to the whole year’s target in the first quarter of 2022.

From October 2021, after restructuring the organizational structure, Vietnam Southern Food Corporation – Joint Stock Company recovered lost profit, the return is many times higher compared to the whole year’s target in the first quarter of 2022.

On May 31, Vietnam Southern Food Corporation – Joint Stock Company (Vinafood 2, stock code VSF) just held the 2022 annual general meeting of the company’s interested shareholders in Ho Chi Minh City. At the meeting, Vinafood 2’s directors presented business results implemented since October 2021.

The annual general meeting was organized on May 31, 2022

Specifically, the total net revenue of Vinafood 2 in 2021 was VND 16,563 billion, approximately the same period, but gross profit declined compared to that of 2020 due to the high cost of goods sold. After deducting all expenses, the company recorded a net loss of  VND 326 billion, an increase of 36.5% over the previous year. In sum, by the end of 2021, the one-time “king” of rice exports experienced a total accumulated loss of VND 2,651 billion.

Simultaneously, the enterprise’s main selling product, rice, plummeted sharply by 30.99% compared to the last year 2020, and reached only 459,970 tons, of which direct export decreased by 13.75% and domestic consumption decreased by over 54.5%. Particularly, the quantity of flour and processed food sold rose more than that of 2020, by 17.65% and 19.7%, respectively.

In the opinion of the company’s directors, the reason that contributed most to the loss was the serious impact of the Covid-19 pandemic, causing the export situation to face many difficulties and large costs incurred. Accordingly, during the 2 years of the pandemic, Vietnam’s rice export policy in main markets had many adverse changes for this business activities; the global logistics system is seriously influenced leading to a sudden growth in freight rates. Besides, the lack of capital to implement the production and business plan also affected the purchasing process of the Corporation.

Additionally, the business apparatus is weak and lacks personnel, especially independent units that are very passive in business. Specifically, out of 14 dependent agencies and the Corporation’s office, only two departments are operated effectively, and the others run at a loss.

Vinafood II’s Shareholders

Regarding the business plan for 2022, Mr. Nguyen Huy Hung – Chairman of Vinafood 2 quoted that this year, the company aims at a revenue target of VND 15,717 billion (equivalent to 94% compared to the achievement in 2021), the pre-tax profit gains VND 104 million, a dramatic increase in comparison with the loss of VND 298 billion last year.

Mr. Nguyen Huy Hung – Secretary of the Party Committee, Chairman of the Board of Directors

Discussing the converting losses into profits plan in 2022, Mr. Hung emphasized: “From October 2021 up until now, the Corporation has received a lot of considerable attention from the State Capital Management Committee in orienting the development. With the directing and harmony from the leadership to the employees, business activities are moderately stabilizing, being cost-reducing, improving labor efficiency, and achieving more competitiveness in the market, and will be profitable in the first quarter of 2022. In the upcoming time, the Corporation shall active the centralized management mode, in which the food trading field will be organized in the concentration strategies, increased the company’s influences, divide markets, and coordinate business activities in dependent units; especially, Vinafood II will build up their market development, communication and marketing also to make them a “king” brand in the domestic rice industry that can possibly compete against international ones.

In the General Meeting, there was a noteworthy notice that the enterprise dismissed 2 members of the Board of Directors namely Ms. Nguyen Thi Hoai and Mr. Nguyen Ngoc Nam.

Moreover, Vinafood II received an offer from T&T Group Joint Stock Company’s shareholders’ group on May 20, a strategic shareholder owning 25% of charter capital appointing Ms. Ho Thi Cam Van to join the Company’s Board of Directors. The company has informed and consulted with the State Capital Management Committee and the Central Business Sector Party Committee.

Vinafood II will select additional members of the Board of Directors after the process is finished. However, they will not assign more members to the Board of Directors at this conference.

It’s been known that as of March 31, 2022, Vinafood II has 2 main stockholders, the State and T&T Group JSC owning 51.43% and 25% respectively of charter capital and the remaining 23.57% belongs to all other shareholder groups.

Meanwhile, the corporation dismissed Mr. Tran Vinh Thanh, the current Supervisor, and promoted Ms. Tran Thi Doan Thu to this position instead.

Mr. Do Huu Huy presented flowers to 3 term expires members, namely Mrs. Nguyen Thi Hoai, Mr. Nguyen Ngoc Nam, and Mr. Tran Vinh Thanh.

According to the leader of the Commission for the Management of State Capital at Enterprises (CMSC), Mr. Do Huu Huy, Vice Chairman of the CMSC, the company organized a conference and achieved a high approval rating among the State and a group of strategic shareholders after 4 years.

At the same time, Mr. Huy added, the State Capital Management Committee at enterprises shall be responsible for how to revive Vinafood 2 – a large corporation that is ranked as one of the most essential businesses in Vietnam. The company is being operated at a loss and there are also many problems with management policy. In conclusion, all of this requires an appropriate development orientation with some urgent resolutions in the next period.

First and foremost, the Corporation strictly follows the guidance of the Committee for the Management of State Capital on assets and capital preservation.

Second, highly concentrating on settlement for equitization process… possessions and related to land.

The third is seriously implementing the determination of the government to stabilize food prices, in the Mekong Delta especially.

Next, the agreement between the State stockholders and the strategics is suitable for public businesses, accomplishing the title of General Director in the near future.

And finally, focusing on the project of reforming state-owned enterprises.

Delegates voting

Remarkably, as per Vinafood 2’s recently reported consolidated financial statements for the first quarter of 2022, the profit of this business was 48 times higher than the annual’s interest target (VND 104 million for the whole year). Thereafter, at the end of the first quarter, the company accounted for a pre-tax profit of approximately VND 5 billion, a great enhancement in comparison with the loss of nearly VND 74 billion during the corresponding period last year. After-tax, the company recorded a net profit of VND 482 million, for the first time after 9 quarters of loss (at the same stage last year, it lost VND 78 billion).