This information is stated in the inspection conclusion at Vietnam Cement Corporation (Vicem) recently issued by the Ministry of Finance Inspectorate.

According to the Inspectorate of the Ministry of Finance, as of December 31, 2023, the long-term financial investment of the parent company - Vietnam Cement Corporation was more than VND 13,973 billion in 31 companies, accounting for 93% of the owner's capital contribution.

Vicem's dividends and profits accounted for in financial revenue in 2023 are more than 417 billion VND, equal to 3% of total investment capital.

In 2023, 17 companies had a profit of 186 billion VND, while 14 companies had a loss of more than 1,610 billion VND. Of which, Ha Long Cement Joint Stock Company had the biggest loss, up to nearly 648 billion VND.

There are 15 companies with accumulated losses by the end of 2023 of more than VND 7,923 billion, corresponding to the capital contribution ratio of the Parent Company - General Corporation at each company of VND 5,895 billion, equal to 85.3% of the capital invested by the Parent Company - General Corporation in these companies.

As of December 31, the Corporation made provisions for losses for 7 investments with an amount of approximately VND 3,018 billion.

Many of Vicem's investments are at risk of losing capital.

Specifically, Vicem has invested more than VND1,132 billion into Vicem Tam Diep (accounting for 100% of charter capital). However, this subsidiary has accumulated losses of about VND1,126 billion, equivalent to 99.5% of the owner's capital contribution. With this investment, Vicem must set aside more than VND1,069 billion in provisions.

"The company is experiencing capital imbalances and has low debt repayment capacity. The corporation is supporting this company with loans to pay off long-term debts totaling VND396 billion," said the Ministry of Finance inspector.

At Ha Long Cement Joint Stock Company, Vicem invested about VND1,605 billion (accounting for 82.69% of charter capital). By the end of last year, Ha Long Cement had accumulated losses of more than VND4,900 billion, leading to negative equity of VND2,960 billion. Vicem set aside VND1,606 billion for risk provisions at this company.

Previously, Ha Long Cement belonged to Song Da Corporation, transferred to Vicem in 2016. At the time of transfer, this enterprise had negative capital of 2,658 billion and accumulated loss of 3,640 billion.

The Inspector of the Ministry of Finance said that the production and business situation of Ha Long Cement is still facing many difficulties, leading to the Company's continuous losses, serious financial imbalance, inability to pay debts when due, and facing the risk of having to stop operations due to lack of cash flow.

At Vicem Song Thao Cement Joint Stock Company, Vicem invested 516 billion VND (80.79% of charter capital). By December 31, the company had accumulated losses of over 312 billion VND, equivalent to more than 49% of Vicem's capital contribution. This corporation set aside 252 billion VND for the investment here.

Previously, Song Thao Cement belonged to the Housing and Urban Development Corporation (HUD). At the time of transfer to Vicem, the enterprise had accumulated losses of 430 billion.

Similarly, Vicem Hai Van, Vicem's investment capital is 314 billion VND (equivalent to 75.75% of charter capital) and in 2023 recorded a loss of more than 64 billion VND, accumulated loss of more than 60 billion, forcing Vicem to set aside a provision of nearly 34 billion VND.

Or at Song Da 12 Joint Stock Company, with an investment capital of 12 billion VND (24% of charter capital), accumulated loss of nearly 233 billion VND, Vicem had to set aside a provision of more than 10.2 billion.

At Dong Nai Construction Materials Roofing Joint Stock Company, Vicem invested more than 43 billion VND, holding 12.5% ​​of capital. This company has accumulated losses of 787 billion VND, so Vicem set aside 41.3 billion VND in provisions.

Or at Dong Nai - Kraite Rubber (Vicem holds 11.27% of capital), there was also an accumulated loss of more than 179 billion, forcing Vicem to set aside a provision of 4.2 billion VND...

In addition, 9 other subsidiaries and affiliates of Vicem also suffered losses in 2023. However, equity is still higher than the amount Vicem invested.

According to Vicem's explanation, 10 subsidiaries had low business efficiency, many units suffered large losses last year and accumulated negative profits of about 6,700 billion VND for many reasons.

Of which, Vicem Tam Diep, Vicem Song Thao, and Ha Long Cement are all 3 Vicem units that received the transfer of state capital from localities or other enterprises under the Ministry of Construction. These 3 companies had accumulated losses of 6,341 billion by the end of last year, an increase of 2,271 billion compared to the time of transfer.

Along with that, production output is much lower than the maximum design capacity, leading to an increase in fixed costs per unit of product and maintenance costs. At the same time, the selling price of clinker and cement does not increase and some products are even lower than the cost price. Interest expenses are high because some companies invest mainly with borrowed capital. Exchange rate fluctuations also cause financial costs to arise due to large exchange rate differences. Along with that, input material prices increase, depreciation costs are high, some mining projects have to stop mining due to local planning changes...

Faced with this situation, the Inspectorate of the Ministry of Finance requested Vicem to review and evaluate the financial accounts of inefficient businesses. Vicem must direct the representatives of capital contributions at these parties to consult with the Board of Directors and the Board of Management to develop specific plans to overcome financial difficulties and prolonged accumulated losses.

The Inspectorate also requested Vicem to urgently review and decide on appropriate financial supervision of companies showing signs of financial insecurity.