(Vnfinancebusiness) In Q2 2023, Gross Profit (GP) from game nổ hũ tặng tiền livestock sector applying game nổ hũ tặng tiền 3F model (FEED-FARM-FOOD) recorded growth of 82%, with a gross profit margin from game nổ hũ tặng tiền livestock sector reaching 26%. Continue to expand game nổ hũ tặng tiền scale of barns, feed mills and distribution chains toward sustainable development.
BAF Vietnam Agricultural Joint Stock Company (BAF, Company) released its Consolidated Financial Report for Q2 2023, showing stable growth in business operations. Consolidated Net Revenue in Q2 2023 reached VND1,638 billion, a 14% increase compared to game nổ hũ tặng tiền same period. Gross Profit in Q2 2023 reached VND102 billion, a 54% increase compared to game nổ hũ tặng tiền same period, with a gross profit of VND63 billion from game nổ hũ tặng tiền livestock sector, an 82% increase. game nổ hũ tặng tiền gross profit margin from game nổ hũ tặng tiền livestock sector was 26%.
Cumulatively for game nổ hũ tặng tiền first 6 months of 2023, Consolidated Net Revenue reached VND2,455 billion, slightly lower than game nổ hũ tặng tiền same period, mainly due to decreased Revenue from agricultural merchandise and livestock business operations. Net Revenue from agricultural merchandise decreased by 21% due to a strategic reduction in this activity, which had a low gross profit margin and was subject to significant risks influenced by game nổ hũ tặng tiền Russia-Ukraine war. Besides, game nổ hũ tặng tiền company retained Feeder Pig for meat production, resulting in pork sales not matching game nổ hũ tặng tiền overall herd scale. Therefore, Livestock Revenue reached nearly VND600 billion.
Due to proactive sourcing of livestock feed from 3 “vegetarian” feed mills meeting GLOBAL GAP and FSSC 21000 standards, game nổ hũ tặng tiền cost of goods sold reached VND2,289 billion, a 17% decrease compared to game nổ hũ tặng tiền same period. GP reached VN166 billion, with a gross profit margin of 7%, a one percentage point increase compared to game nổ hũ tặng tiền same period. Enterprise Management Costs, Sales Costs, and Interest Expenses increased during game nổ hũ tặng tiền farm scale and distribution chain expansion. Pre-tax profit reached nearly VND18 billion.
As of game nổ hũ tặng tiền end of June 2023, game nổ hũ tặng tiền company’s Total Assets reached VND6,380 billion, a 35% increase compared to game nổ hũ tặng tiền beginning of game nổ hũ tặng tiền year. Short-term and long-term assets increased by 38% and 31%, respectively. Inventory was recorded at VND1,216 billion, a 38% increase, including pigs expected to be released to game nổ hũ tặng tiền market when pork prices were trading around 62,000 – 65,000 VND/kg from Q3 2023 onwards. Long-term assets in progress reached nearly VND1,000 billion, a 174% increase as game nổ hũ tặng tiền company rapidly put additional farms into operation in game nổ hũ tặng tiền year’s final months. Short-term and long-term loans amounted to VND1,603 billion, including convertible bonds issued to game nổ hũ tặng tiền International Finance Corporation (IFC) with an interest rate of 5.25% per annum for a 7-year term. BAF’s financial indicators reflect a state of stable finances, with a current ratio and quick ratio of 1.1 and 0.8 times, respectively.
game nổ hũ tặng tiền financial indicators of BAF reflect a stable financial condition, with a current ratio and quick ratio reaching 1.1 and 0.8 times respectively.
From 2020 to game nổ hũ tặng tiền present, BAF has implemented a closed livestock chain model under game nổ hũ tặng tiền 3F framework (FEED-FARM-FOOD) and has observed rapid growth in scale. game nổ hũ tặng tiền operation of 3 animal feed plants has achieved FSSC22000 and GLOBAL GAP standards. game nổ hũ tặng tiền number of modern farms has tripled to 23. game nổ hũ tặng tiền distribution chain has expanded to 60 Sibafoods and over 400 MeatShops. After a period of scaling up, game nổ hũ tặng tiền company has reviewed and adjusted its business operations toward sustainable development for game nổ hũ tặng tiền next phase. It has strengthened control activities, reduced expenses, and optimized game nổ hũ tặng tiền livestock process in line with game nổ hũ tặng tiền strategy to become one of game nổ hũ tặng tiền top 3 leading livestock companies in Vietnam.
As a result, business operations have not met expectations in game nổ hũ tặng tiền first 6 months of 2023. game nổ hũ tặng tiền company’s total herd has reached over 230,000 pigs, corresponding to about 570,000 market-ready pigs expected to sell from Q3 2023 onwards. Given game nổ hũ tặng tiền context of pork prices fluctuating around 62,000-65,000 VND/kg at present and projected to increase to 70,000 VND/kg in game nổ hũ tặng tiền final months of game nổ hũ tặng tiền year, game nổ hũ tặng tiền business results of BAF are anticipated to show positive outcomes in game nổ hũ tặng tiền upcoming period.
Expected Sustained High Pork Prices
In game nổ hũ tặng tiền past 3 months, pork prices have witnessed a 21% increase, rising from 51,000 VND/kg to 62,000 VND/kg due to reduced supply due to disease outbreaks and farmers not restocking.
Former Deputy Director of game nổ hũ tặng tiền Livestock Department (Ministry of Agriculture and Rural Development), predicts that pork prices are expected to stabilize around game nổ hũ tặng tiền lunar month of July (mid-August to mid-September in game nổ hũ tặng tiền Gregorian calendar). Demand could recover as schools reopen for game nổ hũ tặng tiền new academic year, increasing demand for institutional kitchens.
KBSV Securities Company anticipates that in game nổ hũ tặng tiền second half of 2023, pork prices will continue to recover and fluctuate around 65,000 – 68,000 VND/kg, nearly an 8% increase compared to game nổ hũ tặng tiền same period, driven by game nổ hũ tặng tiền removal of pork from stabilization goods and game nổ hũ tặng tiền ongoing downward trend in supply since game nổ hũ tặng tiền beginning of game nổ hũ tặng tiền year.
This favorable condition is expected to greatly benefit BAF, which currently holds a significant inventory of pigs, enabling it to make a breakthrough and achieve positive business results in game nổ hũ tặng tiền coming months.