Mr. Duc's Hoang Anh Gia Lai makes big profits, selling fruits for billions every day

Hoang Anh Gia Lai Joint Stock Company (HAGL: HoSE: HAG) has just announced its financial report for the second quarter of 2024 with significantly improved profits.

Accordingly, in the second quarter of 2024, the company's net revenue reached VND 1,518 billion, up 5%. In the revenue structure, revenue from fruits increased by 98% over the same period to VND 1,116 billion, accounting for 74% of revenue. The gross profit margin of this segment is about 35%.

In contrast, pork sales revenue decreased by 28% to VND320 billion, gross profit margin was about 27%. Sales revenue of products and goods also decreased by 84% to VND58 billion and brought in only VND12 billion in gross profit.

After deducting expenses, in the second quarter of 2024, Hoang Anh Gia Lai reported a profit after tax of VND281 billion, 3.4 times higher than the same period last year. Explaining the profit difference, Hoang Anh Gia Lai said that the profit growth in the quarter was due to increased banana export activities.

In the first 6 months of the year, Hoang Anh Gia Lai achieved VND2,759 billion in net revenue, down 12%. Of which, revenue from fruit reached VND2,034 billion, or more than VND11 billion per day. After deducting expenses, Hoang Anh Gia Lai reported a profit of VND507 billion, up 32% over the same period.

Regarding investment projects, Hoang Anh Gia Lai focuses on pig farming and banana and durian cultivation. In the first 6 months of 2024, Hoang Anh Gia Lai increased the durian area from 1,500 hectares to 1,947 hectares, an increase of 447 hectares; the banana area remained at 7,000 hectares.

This year, Hoang Anh Gia Lai set a record high revenue target of VND 7,750 billion, up 20% compared to 2023. The target profit after tax is VND 1,320 billion, down 26% compared to last year's results. Thus, after 6 months, Hoang Anh Gia Lai has achieved 36% of the revenue target and 38% of the annual profit target.

Despite positive business results, Hoang Anh Gia Lai still has an accumulated loss of nearly VND904 billion as of June 30. It is known that if the plan is completed, 2024 will be the third consecutive year Hoang Anh Gia Lai reaches the profit milestone of thousands of billions of VND, supporting the elimination of accumulated losses.

Bau Duc and Hoang Anh Gia Lai are expecting a bumper durian crop.

Sharing with shareholders at the 2024 Annual General Meeting of Shareholders, Mr. Duc said that he will strive to eliminate accumulated losses by the end of this year in many different ways.

In 2024, Hoang Anh Gia Lai expects fruit tree revenue to contribute VND 5,540 billion, accounting for 71% of total revenue; banana-fed pig revenue to contribute VND 1,550 billion, accounting for 20% of total revenue; and other products and goods to contribute VND 660 billion, accounting for 9% of total revenue.

Regarding the financial situation, the asset scale of Hoang Anh Gia Lai as of June 30 was VND21,560 billion, a slight increase of VND600 billion compared to the beginning of the year. The large proportion of the asset structure is in receivables, fixed assets and unfinished construction costs.

Hoang Anh Gia Lai Joint Stock Company has placed high expectations on the durian sector in the second half of 2024. Hoang Anh Gia Lai is following the 2 trees, 1 animal model, and all 3 products: pigs, durians and bananas are being evaluated as doing well. Hoang Anh Gia Lai owns 1,200 hectares of durian in Laos and this year is the first year of fruiting on an area of ​​200 - 300 hectares.

Mr. Doan Nguyen Duc - Chairman of Hoang Anh Gia Lai informed that with 300 hectares about to be harvested, the company expects to have revenue of hundreds of billions of VND. By 2025 - 2026, this number will reach thousands of billions of VND.

Hoang Anh Gia Lai has continuously changed its core business, from real estate to sugarcane and rubber agriculture; then shifted to cattle farming; moved to fruit and pig farming; and most recently, durian farming. In the coming time, Hoang Anh Gia Lai will develop according to the “two trees and one animal” model. In which, banana farming, durian farming and pig farming are the key areas that the company is aiming for.

Hoang Anh Gia Lai expects that its 2024 revenue will increase dramatically in the third and fourth quarters, when it officially exploits a part of the durian area. Of which, durian grown in Vietnam (main crop) will have revenue in August-September 2024 and durian grown in Laos (off-season crop) will have revenue in October-December 2024.