Growth nearly tripled in the fourth quarter, NAF’s after-tax profit for the first year reached VND 100 billion
In a striking fiscal performance, Nafoods Group JSC (HoSE: NAF) disclosed that its after-tax profits for Q4 of 2023 surged to VND 14 billion, marking a substantial 2.8-fold increase compared to the same period last year, buoyed by an impressive uptick in gross margin. The company’s financial triumph by year-end saw it surpassing its initial profit forecast by a notable 3.5%.
A closer look at the financial figures reveals that NAF’s net revenue for Q4 2023 encountered a 10.4% dip to VND 377 billion compared to the previous year’s equivalent period. However, a robust gross margin improvement of 12.7 percentage points to 35.1% ensured that gross profits soared to VND 132.5 billion, reflecting a substantial 40% growth year-over-year.
The year also witnessed a consistent trend in sales and administrative expenses mirroring the pattern observed over the initial nine months, with a notable decrease in sales costs by 33.1% and an increase in management costs by 46.1%, positioning them at VND 29.3 billion and VND 52.2 billion respectively. This resulted in a total SG&A expense figure of VND 81.5 billion, climbing marginally by 2.5% compared to the same period last year.
These fiscal adjustments culminated in a net business operation profit of VND 12.9 billion, a commendable 67% leap from the preceding year. Furthermore, a shift in other profits to VND 6.5 billion, from a loss of VND 0.5 billion in the previous year, propelled NAF’s after-tax profits to the 2.8-fold increase.
Cumulatively for 2023, NAF posted net revenues of VND 1,732.5 billion, slightly trailing by 1.9% from the prior year. However, a notable gross margin improvement by 5.8 percentage points to 27.1% facilitated a 24.7% increase in gross profits to VND 468.8 billion. This fiscal prowess enabled after-tax profits to reach an unprecedented VND 109.7 billion, marking a significant 37.4% growth and achieving the landmark figure of over VND 100 billion for the first time since its listing in 2015. The after-tax profit margin impressively climbed by 1.8 percentage points to 6.3% compared to 2022.
With a 2023 revenue target of VND 2,125 billion and an after-tax profit goal of VND 106 billion set, NAF commendably realized 82% of its revenue ambition and exceeded its profit target by 3.5%.
The company noted that despite encountering challenges in the Russian market in 2023, it managed to sustain its sales level from the preceding year, driven by robust growth in the juice and frozen vegetable (IQF) sectors. Improved gross margins were attributed to enhanced supply chain management, cost reductions, and capitalizing on favorable market conditions. Meanwhile, a rise in administrative expenses was observed in 2023 due to amplified control, risk management activities, and increased provision costs.
As of December 31, 2023, NAF’s total assets stood at VND 2,035 billion, marking a 17% increase from the start of the year. While short-term assets saw a 13% reduction to VND 1,016 billion, long-term assets experienced a 77% surge to VND 1,020 billion, predominantly due to successful M&A transactions bolstering ownership in An Food JSC and Nafoods Northwest JSC, which significantly elevated the long-term asset figure.
The financial strategy saw a healthier realignment in the structure of current assets, with cash, cash equivalents, and short-term financial investments (bank deposits of 3-12 months) nearing VND 180 billion by year-end, starkly up from VND 66.5 billion at the year’s start. Conversely, short-term receivables markedly reduced from VND 908 billion to just VND 497 billion.
Liabilities witnessed an adjustment as well, with short-term loans and financial lease liabilities ascending from VND 578.5 billion at the beginning of the year to VND 737.6 billion, while long-term liabilities experienced a slight decrement from VND 74.9 billion to VND 71.7 billion at year-end.