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VietNamNews

Cash-flow problems push back dividends

Update: July, 02/2012 - 10:00

HA NOI — Various listed companies have continued to delay paying scheduled dividends, with many blaming inadequate cash flows and some even postponing payouts several times.

Among the companies lacking funds to make dividend payments are PVC Petro Capital & Infrastructure Investment (PTL), An Phu Irradiation (APC), Song Da Someco (MEC), VICEM Gypsum and Cement (TXM), construction company Song Da No 7 (SD7), Mechanical Contruction & Foodstuff (MCF), and Construction Materials Trading (CNT), reports ttvn.vn.

Five of these companies – PTL, TXM, SD7, MCF and CTN – have delayed their payment dates more than once.

Song Da No 7 (SD7) and APC are short of working capital (short-term debts have exceeded short-term assets), making it impossible for them to carry out plans to pay cash dividends of 16 per cent and 10 per cent, respectively.

By the end of March, SD7's short-term debts exceeded short-term assets by VND154 billion (US$7.3 million), while APC's shortfall was VND7.6 billion ($362,000).

PTL, TXM and MCF have all blamed the delays on late payments from their business partners.

Steelmaker Hoa Phat Group (HPG), one of the 10 leading companies on the HCM City Stock Exchange by market capitalisation, has become the latest to announce that it is putting off payment of its dividend on 2011 profits to the end of this year.

HPG initially planned to pay this month in the form of additional shares a 20-per-cent dividend on last year's profits. While cash flow problems are therefore not the reason for the delay, HPG said they did not want additional shares diluting the company's share values during the current bleak period on the market. If the company had proceeded with the payout, nearly 70 million new HPG shares would have begun trading on the HCM City exchange.

HPG remains in stable financial condition. At the end of the first quarter, it had nearly VND720 billion ($34.3 million) in cash and cash equivalents on hand. — VNS

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