Pomina Steel’s new blast furnace in Ba Ria-Vung Tau Province, southern Vietnam. Photo by courtesy of the company.
Pomina, one of Vietnam’s largest steel producers, is seeking shareholders’ permission to use VND450 billion ($19.4 million) from its development fund to cover mounting losses.
The cash, accounting for 88 percent of its development fund, would be transferred to its post-tax profit account and used to wipe off the VND202 billion in post-tax losses the company had accumulated as of the end of September this year.
The Ho Chi Minh City Stock Exchange had in April issued a warning to investors about Pomina’s POM shares as the company was yet to address its losses.
The HCMC-based company had recorded six consecutive quarter losses in a row before posting a post-tax profit of VND16.18 billion in the third quarter.
Pomina’s board said that the construction of a blast furnace last year had financially burdened the company.
The furnace, located in the Pomina 3 steel factory in southern Ba Ria-Vung Tau Province, began operations last month and is set to produce high quality products for the construction of airports and roads.
The products will be exported to ASEAN countries and Canada, the company said.
Pomina is the fourth largest steelmaker in Vietnam last year in terms of revenue, according to online solutions company VietnamBiz.