Steel maker Hoa Phat expects lower profit in 2022

By An Le
Tue, May 24, 2022 | 6:38 pm GMT+7
Hoa Phat Dung Quat Iron and Steel Integrated Complex in Quang Ngai province, central Vietnam. Photo courtesy of the group.

Hoa Phat Dung Quat Iron and Steel Integrated Complex in Quang Ngai province, central Vietnam. Photo courtesy of the group.

Hoa Phat Group, Vietnam’s leading steel producer, expected a profit after tax of VND25,000-30,000 billion ($1.08-1.29 billion) in 2022, down 13-28% from 2021.

"The steel sector is now unfavorable, as evidenced by the coming financial reports for the second, third, and fourth quarters. You will realize how severe the situation is,” Hoa Phat Chairman Tran Dinh Long told the company’s annual general meeting on Tuesday.

The leader attributed the weaker profit to rising prices of raw materials due to the Russia-Ukraine conflict, as well as lower demand stemming from the zero-Covid policy in China, with the market accounting for 60% of global steel consumption.

"When the Russia-Ukraine war first erupted, many people believed that the Vietnamese steel industry would benefit from having two weaker competitors, Russia and Ukraine, which are major steel manufacturers. The reality, however, is not that rosy," Long said.

But the chairman reassured shareholders by stating that Hoa Phat consistently outperforms its competitors in the steel business.

Following Long’s statement, a series of steel stocks plunged deeply in Tuesday’s afternoon trading session, with the three largest stocks HPG (Hoa Phat Group), NKG (Nam Kim Steel), and HSG (Hoa Sen Group) hitting the floor at one point.

Hoa Phat expected a record-high consolidated revenue of VND160,000 billion ($6.89 billion) in 2022, up nearly 7% from last year’s result.

The higher revenue is attributed to the output of Hoa Phat Dung Quat Integrated Iron and Steel Complex, container products, and its household electronics segment.

However, the disproportionate volatility of steel prices given rising raw material and fuel expenses, along with increased financial costs reduced the group's profit after tax.

Hoa Phat planned to start building the Hoa Phat Dung Quat 2 Iron and Steel Complex in the central province of Quang Ngai this year. The firm has obtained financing agreements of VND35,000 billion ($1.5 billion) with eight major Vietnamese banks.

The group is expected to test-operate its container factory in the expanded Phu My II Industrial Park, Ba Ria-Vung Tau province by the end of the year. It also set a target to sell all of its products, maintaining its lead in terms of domestic steel market share.

Hoa Phat recorded a revenue of VND44,400 billion ($1.91 billion) and profit after tax of VND8,200 billion ($353.2 million) in the first quarter, fulfilling about 28% and 27% of its plans, respectively.

Comments (0)
  • Read More
Annual report on FDI in Vietnam identifies new challenges, opportunities

Annual report on FDI in Vietnam identifies new challenges, opportunities

The Vietnam's Association of Foreign Invested Enterprises (VAFIE) will release the 2023 edition of its annual report on foreign investment in the country on Tuesday.

Economy - Mon, March 25, 2024 | 6:13 pm GMT+7

ASEAN, South Korea work to ensure products’ rules of origin

ASEAN, South Korea work to ensure products’ rules of origin

The Agency of Foreign Trade under the Ministry of Industry and Trade, and the ASEAN Secretariat on Monday opened a joint session of ASEAN and Korean experts on the transposition of ASEAN-Korea Free Trade Agreement (AKFTA) product specific rules from harmonised system codes HS 2017 into HS 2022.

Southeast Asia - Mon, March 25, 2024 | 5:58 pm GMT+7

Thailand promotes smart agriculture initiatives

Thailand promotes smart agriculture initiatives

The Federation of Thai Industries (FTI) is advancing smart farming initiatives by collaborating with university experts to launch a pilot project for smart agriculture development.

Southeast Asia - Mon, March 25, 2024 | 5:31 pm GMT+7

Indonesian President-elect pays attention to domestic market to attract investors

Indonesian President-elect pays attention to domestic market to attract investors

The Indonesian incoming administration led by President-elect Prabowo Subianto will highlight the country’s large domestic market to attract foreign investors.

Southeast Asia - Mon, March 25, 2024 | 4:53 pm GMT+7

Thailand’s economy faces long-term downturn

Thailand’s economy faces long-term downturn

Long-term structural obstacles in the export and manufacturing sectors are having significant impacts on Thailand's economy while affecting its ability to compete globally, the Bank of Thailand (BoT) has reported.

Southeast Asia - Mon, March 25, 2024 | 4:45 pm GMT+7

Vietnam securities stocks nosedive as cyberattack hits leading broker

Vietnam securities stocks nosedive as cyberattack hits leading broker

Vietnamese securities stocks dropped sharply Monday afternoon after leading brokerage house VNDirect Securities said it had not been able to recover from a cyberattack that paralyzed its electronic platforms.

Finance - Mon, March 25, 2024 | 4:34 pm GMT+7

Retail grocery chain Bach Hoa Xanh’s revenue up 50% in 2 months

Retail grocery chain Bach Hoa Xanh’s revenue up 50% in 2 months

Bach Hoa Xanh, a retail grocery chain under Mobile World Investment Corporation, posted revenue of VND6 trillion ($242.4 million) in the first two months of 2024, a year-on-year increase of 47%, according to Mobile World.

Companies - Mon, March 25, 2024 | 4:02 pm GMT+7

Apple supplier Luxshare-ICT to hire 1,500 people a month in central Vietnam

Apple supplier Luxshare-ICT to hire 1,500 people a month in central Vietnam

Luxshare-ICT (Nghe An) Limited, a subsidiary of major Chinese electronics producer Luxshare-ICT, is looking to recruit 1,500 people a month for the second phase of its project in Nghe An province.

Industries - Mon, March 25, 2024 | 2:48 pm GMT+7

Thai energy giant Banpu records 2023 revenue of $13 mln in Vietnam

Thai energy giant Banpu records 2023 revenue of $13 mln in Vietnam

Banpu Public Company Limited, a Thai energy giant, recorded a total revenue of THB462 million ($12.7 million) from renewable energy in Vietnam in 2023, according to the firm’s financial statement.

Companies - Mon, March 25, 2024 | 11:52 am GMT+7

Vietnam’s economy to grow 6.1% in Q1: Standard Chartered

Vietnam’s economy to grow 6.1% in Q1: Standard Chartered

Vietnam’s GDP is expected to expand 6.1% year-on-year in the first quarter of 2024, much higher than a 3.32% growth rate in Q1/2023 but lower than the 6.72% posted in Q4/2023, according to Standard Chartered Bank.

A year in review and 2024 forecasts - Mon, March 25, 2024 | 10:55 am GMT+7

Singapore sovereign fund GIC divests from Vietnamese consumer giant Masan

Singapore sovereign fund GIC divests from Vietnamese consumer giant Masan

A group led by Singaporean sovereign fund Government of Singapore (GIC) has cut its ownership in Vietnam’s leading consumer goods manufacturer and retailer Masan Group to below 5%, losing its status as a major shareholder.

Companies - Mon, March 25, 2024 | 10:36 am GMT+7

Priority areas in Australia’s Northern Territory

Priority areas in Australia’s Northern Territory

Australia’s Northern Territory government is working hard to make the economy stronger and more diverse through a range of initiatives, including the Population Growth Strategy, the Economic Development Framework, the Infrastructure Strategy, and target stimulus programs.

Industries - Mon, March 25, 2024 | 8:12 am GMT+7

Tien Giang province seeks investors for 40 projects

Tien Giang province seeks investors for 40 projects

Vietnam's Mekong Delta province of Tien Giang is seeking investors for 40 projects worth VND53.9 trillion ($2.18 billion) in various fields.

Investing - Sun, March 24, 2024 | 10:18 pm GMT+7

Property developer First Real sets sights on becoming number 1 in central Vietnam

Property developer First Real sets sights on becoming number 1 in central Vietnam

First Real JSC will do its best in the next two years to become the number 1 real estate developer in central Vietnam, said chairman Nguyen Anh Tuan.

Companies - Sun, March 24, 2024 | 2:58 pm GMT+7

China favors investment in northern Vietnam province

China favors investment in northern Vietnam province

Investors from China, which covers mainland China, Hong Kong, Taiwan and Macau, are increasingly turning to Vietnam’s northern province of Bac Ninh as an investment destination as the supply chain shift gathers pace.

Industries - Sun, March 24, 2024 | 2:48 pm GMT+7

67% of Vietnamese travellers seek sleep-focused tourism: Booking.com

67% of Vietnamese travellers seek sleep-focused tourism: Booking.com

Up to 67% of Vietnamese travellers surveyed seek vacations focused solely on uninterrupted sleep in 2024, while the figures for mainland China and Japan are 83% and 51% respectively, according to Booking.com.

Travel - Sun, March 24, 2024 | 10:45 am GMT+7