What is the way out for TLH?

Big losses

According to its 4Q2024 financial report, TLH achieved a net revenue of VND 1,777 billion, down 18% compared to the same period last year. At the same time, the company reported a net loss of more than VND 320 billion, marking its worst quarter ever and its third consecutive quarter of losses.

This company explained that its continued losses for the third consecutive quarter were due to a decline in steel consumption, a higher average cost of goods sold, the need to set aside additional provisions for inventory devaluation, and a 42% increase in financial costs driven by rising borrowing needs.

For the full year of 2024, despite a slight 2.4% increase in net revenue to VND 6,305 billion, TLH still suffered a net loss of nearly VND 600 billion, the largest in its operating history.

Severe Negative Operating Cash Flow

In addition to business losses, TLH's operating cash flow continued to be heavily negative in 2024, reaching negative VND 786 billion. Meanwhile, investment and financial cash flows were positive, mainly because the company increased borrowing to offset the negative operating cash flow.

Beyond its core business, TLH also engaged in non-core investments, including VND 46.7 billion in the stock market. Specifically, TLH invested VND 17 billion in DGC shares of Đức Giang Chemicals Group JSC and VND 8 billion in VND shares of VNDIRECT Securities Corporation, along with other stocks. These investments have temporarily lost nearly 12%, leading to an estimated provision of nearly VND 6 billion.

Regarding loans, as of the end of 2024, TLH’s total short-term and long-term debt increased by 40.5% from the beginning of the year to VND 2,038.4 billion, equaling 162% of its equity.

What Lies Ahead for TLH?

TLH recently announced an extension for holding its 2025 Annual General Meeting of Shareholders (AGM). The meeting has been postponed from April 30, 2025, to before June 30, 2025. The company cited the need for additional preparation time as the reason for the delay. Due to this postponement, TLH’s business and production plans for 2025 remain unclear.

TLH is now growing its distribution network in Vietnam's Central and Central Highlands regions by establishing a company and distribution warehouse in Da Nang. The company is relocating its Bắc Nam Steel factory to prioritize core industry production and investing in modernization efforts to improve product quantity and quality.

In the real estate sector, TLH is pursuing investments through joint ventures, selecting high-potential projects in collaboration with experienced real estate companies to implement pending developments.

However, a glimmer of hope has emerged for TLH and the steel industry as a whole. The Ministry of Industry and Trade recently imposed a provisional anti-dumping duty of up to 27.83% on imported hot-rolled coil (HRC) steel from China. As a result, TLH’s stock has become one of the strongest gainers in the steel sector, hitting the ceiling price at VND 5,570 per share in several recent trading sessions.

With TLH’s stock rebounding, the company may seize the opportunity to issue more shares to raise capital for its pending projects. At the same time, it could gradually resolve financial difficulties and restore positive cash flow in its core business.