International Finance Corporation (IFC) is expected to invest VND 600 billion in BAF Vietnam Agriculture Joint Stock Company (BAF, Company) through convertible bonds. Expanding modern livestock farming under bắn cá nổ hũ closed 3F model, raising bắn cá nổ hũ herd size to nearly 1.5 million with a production output of nearly 4 million sows and pigs by 2025.
According to BAF’s proposal to collect shareholders’ written opinions dated July 27, 2022, BAF submitted to bắn cá nổ hũ General Meeting of Shareholders bắn cá nổ hũ offering plan, plan on bắn cá nổ hũ use of proceeds from bắn cá nổ hũ convertible bond private placement of VND 600 billion for IFC.
IFC – a member of bắn cá nổ hũ World Bank (World Bank) is one of bắn cá nổ hũ global financial institutions that operate toward Sustainable Development focusing on developing economies by investing in Private Enterprises. With bắn cá nổ hũ mission to promote economic development by encouraging bắn cá nổ hũ development of Private Enterprises, IFC has invested more than USD 321 billion over bắn cá nổ hũ past 60 years. IFC has invested in bắn cá nổ hũ Vietnam market for nearly 10 years including bắn cá nổ hũ investment in Techcombank, Masan, GEC, etc.
To support bắn cá nổ hũ regional pork industry in Asia to overcome bắn cá nổ hũ consequences of African swine fever (ASF) as well as to secure bắn cá nổ hũ demand for clean and safe food, IFC aims to invest in livestock modern farming enterprises that apply bắn cá nổ hũ 3F model (FEED-FARM-FOOD) in Vietnam, of which BAF has been a typical company. Up to now, BAF has completed bắn cá nổ hũ 3F chain by owning 2 feed mills – 260,000 tons/year; 16 modern farms with a total herd of up to 200,000 heads; and a food distribution system of more than 50 stores and 250 Meat Shop counters.
bắn cá nổ hũ investment will be made in form of convertible bonds, without warrants and without collateral. bắn cá nổ hũ total number of bonds offered is 600 bonds (with a par value of VND 1 billion), a term of 84 months. bắn cá nổ hũ coupon rate is competitive at around 5.25%/year to 5.5%/year. This is considered a very competitive interest rate for bonds without collateral. bắn cá nổ hũ Proceeds collected from bắn cá nổ hũ offering will be used for expanding bắn cá nổ hũ farm, raising bắn cá nổ hũ herd size to nearly 1.5 million pigs aiming toward a production output of nearly 4 million sows and pigs by 2025.
Additionally, IFC will potentially support BAF in enhancing Corporate Governance (CG) towards implementing best corporate governance practices to increase transparency and ensure shareholders’ interests. Integrating sustainable development indicators such as GRI standards into bắn cá nổ hũ development strategy of bắn cá nổ hũ Company, evaluating E&S (social environment) of farming operation towards sustainable development. This will enhance BAF’s image and create opportunities for attracting competitive offshore funding in bắn cá nổ hũ future.
Revenue from livestock has increased nearly tripled in bắn cá nổ hũ first 6 months of 2022
BAF has just released its Consolidated Financial Statements for 2Q of 2022 with sustainable growth in Revenue and Profit from bắn cá nổ hũ livestock segment. Output and revenue from livestock production have continuously increased in recent times.
Consolidated net revenue in bắn cá nổ hũ first 6 months reached VND 3,164 billion, coming mainly from livestock and agricultural trading. bắn cá nổ hũ sharp increase in sales of pigs in Q2 2022 has boosted bắn cá nổ hũ revenue from livestock to reach over VND 800 billion, rising 2.4 times compared to bắn cá nổ hũ same period last year. Revenue structure had positive movement when bắn cá nổ hũ revenue from livestock accounted for 25% of total revenue, much higher than bắn cá nổ hũ level of 6% in bắn cá nổ hũ same period last year, this has shown a shift in bắn cá nổ hũ strategy of bắn cá nổ hũ company to become a leading modern livestock company operated under 3F model in Vietnam.
bắn cá nổ hũ reduction in weight from bắn cá nổ hũ agriculture segment has boosted bắn cá nổ hũ growth of Gross Profit Margin to 7%, which rose sharply from 5% in bắn cá nổ hũ same period last year. General and administrative expenses and Selling expenses recorded an increasing trend compared to first haft last year, this is to spend for bắn cá nổ hũ development of modern pig farms and bắn cá nổ hũ expansion of Siba Food stores and Meat Shop counters. Profit before tax and profit after tax in bắn cá nổ hũ first 6 months of bắn cá nổ hũ year recorded VND 155 billion and VND 128 billion, respectively. Net profit margin reached 4%, higher than 3% last year. EBIT and EBITDA margins increased slightly to 5% and 6% respectively, showing efficient operation and good control of operating costs.
As of June 30, 2022, BAF’s total assets recorded VND 4,856 billion which decreased 11% compared to bắn cá nổ hũ beginning of bắn cá nổ hũ period mainly due to bắn cá nổ hũ completed receivables collection. Short-term receivables dropped sharply by 45% to only VND1,582 billion when BAF actively collected debts to invest and expand their farming system. Inventories reached VND 1,449 billion, which rose 33% compared to bắn cá nổ hũ beginning of bắn cá nổ hũ year, bắn cá nổ hũ sows and pork raising currently will be sold to bắn cá nổ hũ market in bắn cá nổ hũ coming months with expected increasing prices due to supply shortages in recent months. Fixed assets recorded VND 733 billion, up 35% when BAF put into operation many modern farms last year. Short-term and long-term loans increased to VND 420 billion, a slight increase compared to bắn cá nổ hũ beginning of bắn cá nổ hũ period to meet bắn cá nổ hũ increase in herd size and to invest in equipment and modern barns. Even with bắn cá nổ hũ above, BAF’s financial ratios show good financial health with bắn cá nổ hũ current ratio and quick ratio being 1.13 and 0.6 times respectively. bắn cá nổ hũ deb/equity ratio is good at 0.27 times.
bắn cá nổ hũ impact of ASF has severely affected bắn cá nổ hũ total supply of pork, bắn cá nổ hũ purchase price of live pigs continued to increase by 21% from bắn cá nổ hũ beginning of 3Q of 2022. bắn cá nổ hũ purchase price of live hogs is fluctuating strongly at around VND69,000/kg and is expected to remain high until bắn cá nổ hũ end of bắn cá nổ hũ year. This will greatly contribute to BAF’s revenue and profit in bắn cá nổ hũ last months of bắn cá nổ hũ year. Besides, bắn cá nổ hũ timely access to bắn cá nổ hũ fund from IFC will help BAF to expand its development and to increase bắn cá nổ hũ total herd to ensure bắn cá nổ hũ strategy of becoming Top 3 livestock companies in Vietnam.