Hoa Phat steel sales down 27% in first six months

Hoa Phat Group, Vietnam's largest steelmaker, sold 2.9 million tons of construction steel, billets and hot-rolled coils (HRC) in the first half of the year, down 27% year-on-year.

Of this, HRC accounted for 1.2 million tons, down 15%, according to a company report.

Construction steel sales reached more than 1.6 million tons in the period, down 30%. In addition to finished steel, Hoa Phat also provided 36,000 tons of steel billets to other steel mills in Vietnam.

In June, the group's sales volume of construction steel, billets and HRC reached 540,000 tons, down 4% year-on-year, but the highest level since the beginning of the year.

Of which, construction steel sales reached 286,000 tonnes, a 18% decrease year-on-year, mainly due to the high growth in sales volume of Hoa Phat construction steel in the central and southern regions compared to May, at 30% and 69% respectively. HRC sales of 251,000 tons in June marked an increase of 24% year-on-year.

In Vietnam, Hoa Phat holds the top market share in construction steel with 32%, and steel pipes with 27%. It is also among the top five producers of galvanized steel. The group is currently the only Vietnamese company that can produce HRC and prestressed concrete steel strand (PC Strand), contributing to reducing dependence on imported steel, Hoa Phat said in a release.

Hoa Phat, listed on the Ho Chi Minh Stock Exchange as HPG, has created jobs for nearly 30,000 labourers in Vietnam, Australia and Singapore. The group's major business lines include steel, real estate (residential property and industrial parks) and agriculture.

In the first quarter of this year, Hoa Phat reported a post-tax profit of VND383 billion ($16.32 million), following severe losses in Q3 and Q4 of 2022. But the figure was a 21-fold decrease year-on-year.

The group said steel and steel products were the main cash earners in Q1, accounting for 94% of post-tax profit. The profit was equivalent to 5% of the company's target for 2023.

It made losses of VND1.79 trillion ($76.08 million) and VND2 trillion ($85.16 million) in Q3 and Q4 of 2022, respectively.

HPG posted a revenue of VND26.87 trillion ($1.14 billion) in Q1/2023, down 39% year-on-year due to ongoing limited demand.

The company forecast prolonged hardships in Q2/2023. It plans to focus on investing in the Hoa Phat Dung Quat 2 Steel Integrated Complex project in the central province of Quang Ngai, and restart production in Quang Ngai and the northern province of Hai Duong to ensure stocks.

HPG shares stood at VND27,450 ($1.16) at Friday's close.