Top steelmaker Hoa Phat posts Q1 profit after two loss-making quarters

Vietnam's largest steel producer Hoa Phat Group returned to a post-tax profit of VND383 billion ($16.32 million) in the first quarter of this year, following severe losses in Q3 and Q4 of 2022.

Hoa Phat, listed on the Ho Chi Minh Stock Exchange (HoSE) as HPG, said steel and steel products were the main cash earners in Q1/2023, accounting for 94% of post-tax profit. The profit is equivalent to 5% of the company's target set for 2023.

The group made a loss of VND1.79 trillion ($76.08 million) and VND2 trillion ($85.16 million) in Q3 and Q4 of 2022.

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's production in the period included 1.2 million tons of crude steel, down 42% year-on-year; while the sale of construction steel, steel billets, and hot rolled coil (HRC) reached over 1.37 million tons, down 37%.

The sale of construction steel reached 869,000 tons, down 35% year-on-year, though HPG remained the biggest construction steel firm with 34% of the market share. HRC sales hit 482,000 tons, while 26,000 tons of steel billets were supplied to mills in Vietnam.

The group recorded sales of 160,000 tons of steel pipes and 69,000 tons of galvanized sheet products in the three-month period, down 23% and 34% year-on-year, respectively.

HPG 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 climbed 0.48% to VND21,150 ($0.9) in the morning trading session of Wednesday.