Business in turmoil, female president mortgages her house to borrow money

After escaping the mandatory delisting, SMC Steel returned to a loss-making state. Notably, the Chairman of the Board of Directors advanced tens of billions of VND from the company while using all of his shares and his personal house to secure the loan.

Just escaped delisting, but suffered heavy losses

SMC Investment and Trading Corporation (HoSE: SMC) has just announced unusual information showing that this enterprise suffered heavier losses after a semi-annual review.

Specifically, according to its separate financial report, SMC lost more than VND173 billion in the first half of the year, instead of the figure of nearly VND150 billion as in its independent report. The audited consolidated report shows that SMC lost more than VND81 billion, instead of a loss of VND43.2 billion.

The reason SMC lost more was because the company had to increase the provision for receivables at its member units by more than VND18 billion, along with more than VND5 billion in investment loss costs at VSSC Company and more than VND18 billion in debt write-off costs with its subsidiary SMC Da Nang due to the dissolution procedures.

The report also noted that SMC had made an advance payment of VND42 billion to SMC's Board of Directors Chairwoman, Ms. Nguyen Thi Ngoc Loan, to resolve work. This advance payment was reported to the Board of Directors at the meeting on August 21 and is currently awaiting approval from the company's Board of Directors.

SMC's Chairman of the Board of Directors is mortgaging his personal assets, including all shares and his house, to suppliers and credit institutions to secure SMC's loans.

Steel giant SMC is facing many difficulties after a long period of struggling due to the sluggish real estate market since the end of 2021 and bad debt from a real estate giant.

SMC explains that its loss in the first half of 2025 after audit increased compared to its self-reported report. Source: Financial statements

SMC suffered heavy losses in 2022 and 2023 but escaped the risk of delisting shares on HoSE thanks to adjusting its report from loss to profit in 2024.

Specifically, SMC has announced its audited financial report for 2024 with just enough profit to escape this situation.

This result was achieved after the company adjusted its Q4/2024 business results and reduced the value of the provision for doubtful debts from VND663 billion to VND328 billion (equivalent to a decrease of 51%). With this change, SMC's after-tax profit in 2024 changed from a loss of VND287 billion to a profit of more than VND29 billion.

SMC Chairman Nguyen Thi Ngoc Loan currently holds more than 14% of SMC shares. SMC Vice Chairman Nguyen Ngoc Y Nhi just bought 1 million SMC shares from July 31 to August 29, increasing her ownership ratio at SMC from 1.9% to 3.25% of charter capital, with a total of nearly 2.39 million shares.

There are still many difficulties

Although it escaped the risk of delisting thanks to profits in 2024, SMC still faces many concerns, because the company escaped losses thanks to the reversal of more than VND 300 billion in provisions and other income. Not only did it continue to suffer losses in the first half of 2025, SMC's operating cash flow was also negative by more than VND 479 billion and short-term debt was about VND 939 billion higher than short-term assets.

From May 30, 2025, HoSE will move SMC shares from control to warning status due to negative undistributed profits in 2024.

In the 2024 audited financial report, the auditor emphasized the receivables from Novagroup Joint Stock Company (Novagroup) and related companies.

SMC is taking a number of measures to improve its financial situation and cash flow. Photo: SMC

Accordingly, by the end of 2024, SMC recorded receivables from Novagroup of more than VND 1,115 billion, and set aside a provision of nearly VND 573 billion.

However, on April 26, 2025, SMC re-determined the provision cost to be reduced to nearly VND 237.6 billion, thereby reversing more than VND 335 billion compared to the previous self-prepared report.

In the explanatory report, SMC stated that on December 20, 2024, the company and Novagroup signed a debt confirmation and a payment commitment document. However, because the time to complete the report coincided with the early Lunar New Year (Tet At Ty) holiday, the records and documents serving the implementation of the payment commitment had not been completed in time. Therefore, SMC could not collect all the necessary documents to adjust down (revert) the provisions for receivables at the time of preparing the 2024 financial statements.

In its explanatory report in May, SMC affirmed that it is still appropriate to meet the going concern assumption because SMC is implementing many measures to improve its financial situation and cash flow; promoting streamlining the apparatus, liquidating assets, and unprofitable activities...

In 2024, SMC also restructured, with its workforce sharply reduced from over 1,200 people (end of 2022) to over 600 people (end of the first quarter of 2025). SMC also sold many assets such as real estate and shares in other companies.

SMC shares fell sharply from VND20,000/share in July 2024 to VND6,000/share in February 2025. As of September 3, SMC shares were priced at VND12,550/share.

The steel industry giant immediately came up with a solution to 'turn the tables' when the auditor raised doubts. The steel distribution giant continuously maneuvered and successfully negotiated with the real estate giant at the last minute, helping the company turn from a large loss to a profit in 2024 and escape delisting. However, there are still many difficulties.

Source: https://vietnamnet.vn/co-nghiep-lao-dao-nu-chu-tich-the-chap-ca-nha-rieng-de-vay-no-2438971.html