On April 22, 2024, Nafoods Group Joint Stock Company (HOSE: NAF) successfully organized the Annual General Meeting of Shareholders (AGM) for the year 2024. The meeting took place at the headquarters of Nafoods Southern Factory – Duc Hoa District – Long An Province, one of the company’s most important factories. (source tinnhanhchungkhoan.vn)
Attending the meeting were representatives of Nafoods Group leadership along with 115 shareholders, owning and representing 30,556,905 shares, equivalent to 60.43% of the total voting shares.
The meeting discussed and approved important contents including the 2023 business results, the 2024 business plan, profit distribution plan, private placement plan, share buyback plan, and some other important matters.
Sustainable management platform helps achieve favorable business results
In 2023, NAF achieved a net revenue of 1,733.3 billion VND, equivalent to the previous year. After-tax profit reached 109.9 billion VND, an increase of 37.7% compared to the same period, exceeding the plan by 3.7%. This is the first year NAF has made a profit exceeding 100 billion VND since its establishment.
In terms of business, NAF’s main business segment of exporting fruit juice and IQF frozen fruits continued to maintain a high growth rate, with output increasing by 22% compared to the previous year, thanks to the consolidation of trust and connection with large customers and markets, developing new customers. Meanwhile, the segment of exporting dried fruits and domestic consumption also achieved positive results when successfully exploring new markets, both domestic and launching new products – strategic.
In terms of supply and production, in 2023, the Company always ensured production capacity to meet over 85% of business demand, with product quality guaranteed, strictly adhering to strict production standards such as Costco, SGF, Kosher, good control of output, purchase price when entering the main crop, profit optimization.
Mr. Nguyen Manh Hung – Vice Chairman of the Board of Directors cum General Director of the Company shared that building a sustainable management platform is the main reason that helps NAF achieve favorable results. Specifically, in the year, the Company completed the transformation of the management model, laying the groundwork for expansion and development; supplemented many important professional positions; focused on training, improving the quality and focusing on the development of human resources; successfully applied CRM, SRM, Fast Business Online management systems, and optimized operating procedures, improving work productivity.
Business plan for 2024: Improve “Efficiency and Speed”
In 2024, based on the foundations established in the previous year, the Company aims to focus on improving the efficiency and speed of the management system, by building a data warehouse system, automatic management reporting system, reducing manual work, increasing work efficiency; while continuing to enhance the capacity, skills, knowledge of the team through increased training courses; and enhancing information security system.
Based on that, NAF sets a revenue target of 2,200 billion VND, up 26.9% compared to 2023, after-tax profit of 129 billion VND, up 17.3% compared to the previous year.
Maximum dividend plan of 10% of charter capital for 2024
Regarding the profit distribution plan for 2023, NAF will allocate 13.4 billion VND to pay annual fees to shareholders owning preferred shares, set up a welfare reward fund of 5% of after-tax profit, allocate 3% of after-tax profit to the operating budget of the Board of Directors.
Regarding the profit distribution plan for 2024, the Company plans to continue to allocate 13.4 billion VND to pay annual fees to shareholders owning preferred shares, set up a welfare reward fund of 5% of after-tax profit, allocate up to 5% of after-tax profit to the operating budget of the Board of Directors, and distribute dividends to shareholders up to 10% of the charter capital.
As for the plan to issue shares to pay dividends for 2022 approved by the Annual General Meeting of Shareholders in 2023 (10% of charter capital), but not implemented in 2023, the Annual General Meeting of Shareholders has approved the continuation of this plan in 2024.
Maximize the sale of 15 million shares separately
The Annual General Meeting of Shareholders also approved a plan to sell a maximum of 15 million shares separately, to implement or contribute capital to subsidiaries to carry out investment projects, enhance production capacity; and/or supplement working capital. The selling price is authorized for the Board of Directors to decide but ensures not lower than the book value of the Company at the time of sale. The implementation time is expected to take place in 2024 or another deadline as stipulated by the Board of Directors based on the actual conditions after being approved by the State Securities Commission.
NAF’s leadership team shared that in the past time, the Company has received many investment cooperation proposals, as well as a lot of interest and exploration from potential foreign investors to become strategic shareholders of the Company.
Buy back the preferential shares issued to IFC
Regarding the plan to repurchase preferential shares. The Annual General Meeting of Shareholders has approved a plan to repurchase up to 12,358,933 preferential shares issued in 2019 to IFC at the issuance price of 15,000 VND/share. The repurchase price is also authorized for the Board of Directors to decide based on negotiations with preferential shareholders and the terms of the signed investment contract. The source of funds for repurchase is the surplus of equity, after-tax profit not distributed in the consolidated financial statements audited on December 31, 2023. The repurchase time is expected to be divided into 2-3 installments in 2024 or the number of installments and the deadline according to the decision of the Board of Directors based on actual conditions after being approved by the State Securities Commission.
Regarding the reasons for this buyback plan, the Company’s leadership said: IFC started to be interested in and explore NAF since 2018. After more than a year of careful evaluation and appraisal, IFC agreed to invest USD 8 million in NAF through preferential shares. This investment of IFC helped NAF meet financial needs for business and investment plans at that time. On the other hand, it also helped NAF improve corporate governance issues according to the best practices due to the very strict constraints stipulated in the Investment Agreement. In addition, with their reputation and brand, this investment also helped Nafoods’ reputation improve significantly.
However, currently, NAF’s leadership believes that some commitments, constraints signed are no longer suitable for the current situation. Especially the constraints on financial indicators, maintaining the ownership ratio of founding shareholders are currently making it difficult for NAF to mobilize capital for future growth strategies. In addition, the financial costs of this investment are currently quite high compared to the current market. Therefore, after some exchanges and discussions, both parties agreed to end this investment by repurchasing shares and IFC is also willing to return to invest in Nafoods at an appropriate time, with a more suitable financial tool.