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Hoa Phat’s interest expense in the first quarter rose to a record level as the group stopped capitalizing interest after Dung Quất 2 officially began operations, while the VND lending-rate environment remained high throughout Q1 2026.
In its consolidated financial statements for Q1 2026, Hoa Phat (HPG) reported interest expense of more than 1,333 billion dong in the first three months of the year—its highest level on record. On average, the group had to bear nearly 15 billion dong of interest expense per day.
This was about twice the figure in the same period of 2024 and roughly 14% higher than the preceding quarter.
Interest costs increased due to the cessation of capitalization after Dung Quất 2 started operations. In addition, the VND lending-rate environment stayed elevated in Q1 2026.
The supply-demand gap in the banking system pushed lenders to raise interest rates to attract funds to meet growing credit demand for business and production, keeping lending rates high during the quarter.
As of the end of Q1, Hoa Phat’s total financial borrowings were more than 90,617 billion dong, down slightly from 92,174 billion dong at year-end 2024. The decline reflected the start of debt servicing for the Dung Quất 2 project.
This was the second consecutive quarter of borrowings decreasing after peaking in Q3 2025.
In 2025, the Dung Quất 2 project completed testing and began operation. In Q1 2026, hot-rolled coil output reached 1.47 million tonnes, up 48% year-on-year, with production concentrated in the domestic market.
While Hoa Phat entered the debt-repayment cycle for Dung Quất 2, cash on hand (cash, cash equivalents and short-term deposits) rose sharply to over 35.7 trillion dong, the highest level in 11 quarters since Q3 2023.
In the first quarter alone, cash holdings increased by nearly 8,000 billion dong, including a rise of nearly 4,800 billion dong in short-term deposits.
Interest rates remaining high supported higher interest income from deposits. In Q1, Hoa Phat’s interest income from deposits increased 76% year-on-year to 424 billion dong. The figure was also up 54% compared with the previous quarter.
This income helped offset part of the interest costs during the period and supported the group’s profitability.
In Q1, Hoa Phat reported net revenue of 53,313 billion dong, up 40% year-on-year.
Revenue from financial activities rose 13.5 times year-on-year to over 5,900 billion dong, driven by the disposal of a real estate project in Phố Nối, Hung Yen.
As a result, net profit after tax reached over 9,055 billion dong, up 2.7 times year-on-year.
For 2026, Hoa Phat plans revenue of 210,000 billion dong and after-tax profit of 22,000 billion dong, up 33% and 42% respectively from 2025.
With the Q1 results, the group has achieved 25% of its revenue plan and about 41% of its annual profit target.
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