Loc Troi achieved the highest revenue in history

2023 is an extremely difficult year, but Loc Troi Group still achieves many bright spots in its business activities. This is the premise for the next stage of development of the entire Group.

According to the summary report on business activities in 2023, Loc Troi's revenue has grown strongly over the years. In particular, in 2023, it will reach the highest revenue in its operating history with more than VND 16,000 billion, increasing more than 38% compared to 2022.

In the above historical revenue level, the rice sector contributed VND 11,226 billion, accounting for 70% of total revenue. Plant protection drugs contributed VND 3,825 billion, accounting for 24% of total revenue. Seeds contributed VND 685 billion, accounting for 4% of total revenue. Other fields recorded a contribution of VND 352 billion, accounting for 2% of total revenue.

With the results achieved, Loc Troi assessed that this is a testament to the determination of the entire Group and its members in the commitment to reach $ 1 billion in revenue ($ 25,000 billion) in 2024 - 2025. It is also the Group's determination to Continuously expand production links according to the model of large-scale crop spreading and synchronous mechanization, reducing 1 million litres of chemicals sprayed on fields, reducing water resources by 30%...

By the end of 2023, Loc Troi's gross profit will reach VND 2,475 billion, an increase of VND 326 billion compared to 2022 gross profit. However, the profit margin will decrease slightly from 18% in 2022 to 15.4% in 2023, mainly due to the profit margin of the food industry.

According to Loc Troi, a characteristic of the food industry is that the gross profit margin is always low at only 2 - 3%, meanwhile, the contribution rate to revenue is the highest (accounting for 70% of total revenue), so the Group's profit margin decreases accordingly.

Regarding pre-tax profit, Loc Troi announced that pre-tax profit in 2023 will reach VND 150 billion, a sharp decrease compared to VND 558 billion in 2022. Pre-tax profit dropped sharply due to increased financial costs, especially the interest costs of up to VND 582 billion in 2023.

In particular, Loc Troi is maintaining a large source of short-term debt to finance rice-purchasing activities for farmers in linked areas and loan interest rates are increasing higher than in 2022.

As of December 31, 2023, Loc Troi's total assets increased by 31% compared to the beginning of the year, to VND 11,468 billion. Of which, fluctuating assets mainly short-term receivables increased by 182% compared to the beginning of the year, to VND 6,517 billion. Inventory backlog decreased by 7% compared to the beginning of the year to VND 1,969 billion, and long-term assets decreased by 14% compared to the beginning of the year, to VND 2,122 billion.

Regarding business orientation in 2024 - 2025, Loc Troi offers 5 solutions: Improve cash flow from operating activities, debt management and capital structure, enhance operational efficiency, asset management and investment and development.

To improve cash flow, Loc Troi plans to shorten the collection cycle from customers, increase sales of the agricultural materials industry, and increase sales of the seed industry.

Regarding debt management and capital structure, the Group will balance its financial balance to ensure harmony between short-term, medium-term and long-term capital sources. Improve equity ratio by increasing equity through issuing shares. Comprehensive restructuring of Loc Nhan (member unit) includes building an appropriate financial structure and integration with the Group in the upcoming period.

With increased operational efficiency, Loc Troi improves food industry profit margins by controlling costs and enhancing product value; strictly managing inventory to reduce inventory handling days (DIO).

Finally, the Group will mobilize long-term capital to build a rice factory project with a capacity of 10,000 tons/day in Long An, the goal is to increase the total production capacity of finished rice to 15,000 tons/day by 2028.

Invest in exploiting rice by-products, especially straw and rice husks to replace fossil energy; and invest in emissions-reducing farming processes to create carbon certificates that can be commercialized in international markets.

In 2024 and the years to come, Loc Troi and its member companies in the agricultural ecosystem will constantly make efforts to add value to agricultural production and business activities by organizing large-scale production cooperation.

Increase the use of certified varieties, suitable for soil and market, apply mechanization in sync with advanced farming processes and solutions, ensure a balance between biology - and organic - chemistry... providing quality agricultural products that meet the criteria of each domestic and foreign market.

From there, helping to stabilize food security in Vietnam and the world, bringing the position of Vietnamese agricultural products to new heights, improving the quality of life of farmers, and contributing to the sustainable development of the agricultural industry.