Jewelry major PNJ targets 6% after-tax profit growth

Vietnam’s Phu Nhuan Jewelry JSC has targeted VND2.09 trillion ($82.33 million) in after-tax profit this year, up 6% from 2023, setting a new record for the firm.

In its 2024 business plan presented at the firm’s AGM Tuesday, Phu Nhuan Jewelry, listed on the Ho Chi Minh Stock Exchange (HoSE) as PNJ, aims at revenues of VND37.15 trillion ($1.46 billion), up 12% year-on-year.

Chairwoman Cao Thi Ngoc Dung said that the company had cut a lot of costs in 2023, but cannot do it this year. Rising gold prices have seen consumers increase their purchase of gold bars and 24K gold, resulting in surging sales but falling profit margins.

While the first quarter is usually the time when profit grows maximum year-on-year, this year saw a 1% year-on-year reduction, Dung said.

The increase in gold prices to an all-time high has greatly affected gold businesses, she stressed.

"Increased gold prices make it extremely difficult for PNJ to ensure raw materials for production. The recent tightening of the gold market by regulators has also caused difficulties for companies in purchasing gold materials," she said.

Dung also noted that this year, PNJ will continue to maintain five orientations: steady growth, capacity development, resource enrichment, future preparation and development of new businesses.

Revenue maximization at stores, providing customers with refreshing experiences and optimizing operating costs; investing in technology and digital transformation, piloting modern customer access models; and promoting ESG (environmental, social and governance) are tasks that the company will focus on, Dung aded.

20% cash dividend

In 2023, amidst economic difficulties and falling purchasing power, PNJ recorded a 2.2% year-on-year decrease in revenue to VND33.14 trillion ($1.3 billion) and could not achieve the annual plan.

However, thanks to shifting the structure of jewelry lines and optimizing operations and production, the company’s profit margins improved, leading to an after-tax profit growth of nearly 9% to VND1.97 trillion ($77.6 million), surpassing the year’s target and setting a new record.

In 2023, the company opened 48 new stores, bringing the total to 400. In the first two months of this year, another two stores were inaugurated. PNJ has also developed different store models for new brands in its ecosystem.

With excellent business results last year, the board of directors plans to pay cash dividends of 20%, equivalent to VND669 billion ($26.35 million). The company has completed the first payment at a rate of 6%.

PNJ will also issue 3.3 million new shares, or 1% of its floating shares, to employees with outstanding contributions to the 2023 business performance, at VND20,000 ($0.8) per share.

PNJ closed Wednesday at VND92,500 ($3.64) per share.