PAN : approved a prudent revenue and profit plan in 2023

On April 26th, 2023, The PAN Group JSC held its Annual General Meeting of Shareholders in Ho Chi Minh City, approving revenue plan of VND 15,156 billion and profit after tax of VND 840 billion, an increase of 11% and 5.9% y-o-y respectively.

The PAN Group has expressed a sense of caution regarding the seafood sector in 2023.

During the meeting, Mr. Nguyen Duy Hung, the Chairman of the Board of Directors of The PAN Group, presented the company's business plan and profit distribution for 2023. He pointed out that the group has recognized potential risks associated with the macroeconomic environment, particularly the possibility of interest rates remaining high. This could have a negative impact on the group's interest expenses.

Furthermore, climate change and epidemics are becoming more complicated and unpredictable, leading agricultural production to suffer, particularly in nations heavily impacted by climate change like Vietnam.

Therefore, the business plan of each member company as well as the PAN consolidation has been developed with a cautious scenario. Specifically, consolidated revenue and consolidated profit increased by 8% to 9% compared to 2022, amounting to VND 15,156 billion and VND 991 billion, respectively.

The forecasted profit growth from core business in 2023 compared to 2022 will reach 27%. Profit after tax is projected to reach VND 840 billion in 2023, a 5.8% increase from 2022. Profit after tax for parent company's shareholders is VND 402 billion.

As for segment business plan, PAN predicted a positive growth rate for the crop seeds & rice and pesticides business. This is attributed to the high demand for essential food, which creates favorable conditions for the production and trade of seeds and plant protection products. In 2023, it is anticipated that both the revenue and profit of the agribusiness segments will increase by 10 to 15%.

The core business of packaged food and confectionery is projected to see good growth due to the gradual recovery of domestic demand. An increase of 15% in revenue is expected. The company forecasts a 100% increase in pre-tax profit from its core operations in the upcoming year, as compared to the previous year's figures. (This projection excludes any exceptional profits generated from factory transfer transactions).

The nuts and snacks business is expected to resume sales to its primary markets, including China, following the reopening after Covid-19. However, the sales growth may be hindered by a decrease in demand from recently established markets such as the US, Canada, and Europe. Therefore, nuts business is projected to experience a modest increase in revenue. Additionally, it appears that the company was able to avoid significant risks and losses related to exchange rate fluctuations in 2022.

The PAN Group has also determined that the seafood export segment will be significantly impacted by the reduction of orders from key consuming markets, such as the US and EU, as a result of inflation and high inventories caused by the epidemic.

According to the proposals, there are indications of inflation reaching its peak, purchasing power may recover in the second half of 2023, but the aquaculture business plan must remain cautious in the light of very volatile macroeconomics situation.

The revenue forecasted for the shrimp business in 2023 is nearly the same to that of 2022, but profit before tax is projected to increase by more than 20% due to a higher profit margin resulting from the full exploitation of the pond area in 2023.

The pangasius business is heavily influenced by the export market environment and domestic business conditions (fish supply and price). As compared to 2022, it is anticipated that revenue will decrease by 3-5% and pre-tax profit will decrease by 15% to 20%.

According to Mr. Nguyen Duy Hung, the aquaculture segment contributes over 50% of The PAN Group's revenue and 40% of its profit. There are 02 business in the aquaculture segment: shrimp and pangasius. The profit from the shrimp business is forecasted to increase by 20%, whereas the pangasius business is expected to decline by 10% in profit.

PAN accomplishes 95% of its projected revenue in 2022.

PAN reported remarkable business results earlier in 2022, including a 48% increase in revenue, a 51% increase in profit after tax, and a 23% increase in net profit of parent company's shareholders. Specifically, consolidated revenue of The PAN Group reached VND 13,663 billion, and consolidated profit after tax reached VND 774 billion.

Revenue structure 2022 compared to 2021 of PAN Group

The growth reported in 2022 were attributed primarily to the consolidation of results in the fumigation and agrochemicals business of Vietnam Fumigation Joint Stock Company. PAN sustained and achieved substantial growth in its remaining business segments.

In 2022, PAN Group's revenue fell short of the target by 5%. However, the company managed to surpass its profit target despite facing challenges such as economic recession, inflation, and high interest rates. The primary business segments like aquaculture and packaged foods, are all experiencing rapid expansion.

In 2022, the consolidated profit after tax increased by 55% to VND 794 billion, while the profit after tax of parent company shareholders increased by 26.3% to VND 374 billion.

In terms of revenue structure in 2022, the aquaculture segment accounts for 46% (VND 6,300 billion); agriculture accounts for 36% (VND 4,900 billion); and packaged foods accounts for 18% (VND 2,400 billion). Aquaculture contribute 42% of profit after tax, agriculture 53%, and packaged foods 18% (after offsetting other expenses -14% in consolidation).