Vietnam jewelry major PNJ sees weaker Q3 earnings as gold bar trade wanes

Phu Nhuan Jewelry JSC, widely known as PNJ, says it recorded a net profit of VND216 billion ($8.56 million) in Q3/2024, down 14.8% year-on-year, as trade of pure gold bars lost steam in the quarter.

Revenue in the quarter, meanwhile, went up 3.1% year-on-year to VND7,130 billion ($282.6 million), the firm said in a statement on Tuesday.

Of the figure, revenue from 24-carat gold dropped 46% year-on-year to VND1,100 billion, PNJ said, adding that the percentage of pure gold trade fell to 15.5% in Q3/2024 from 29.7% in Q3/2023.

Jewelry retail jumped 20.1% year-on-year to VND4,970 billion ($197.2 million), making up 69.8% of total revenue, up from 60.1% a year earlier.

In January-September, PNJ earned a net profit of VND1,382 billion ($54.78 million) on revenue of VND29,242 billion, up 3.2% and 25.1% year-on-year.

The firm noted that jewelry retail rose 15.9% year-on-year thanks to network expansion and client growth. 24-carat gold revenue jumped 44.1% thanks to increasing demand in the first half of the year.

Positive profit margins from the retail and wholesale channels as well as resource optimization contributed to a 13.3% rise in gross profit in January-September, offsetting a decline in gross profit due to a higher 24-carat gold share.

In the nine-month period, 24-carat gold trade accounted for 35.1% of PNJ’s revenue, up from 30.6% a year earlier.

As of September 30, PNJ had 418 outlets in 57 out of 63 localities across the country, including one wholesale center and 409 PNJ stores.

According to Viet Dragon Securities (VDSC), pure gold bar trade has almost come to zero across PNJ’s network due to scarce supply. Locals mainly buy in gold and do not sell.

The State Bank of Vietnam has not changed its gold management policy, causing the scarcity of gold bars to continue in the coming years, said the broker.

This means that PNJ will likely record zero revenue from gold bar trade from 2025 onwards, said VDSC.

Shares of PNJ, traded on the Ho Chi Minh Stock Exchange as PNJ, lost 1.7% to VND93,000 ($3.69) apiece at Tuesday’s close, giving the firm a market cap of VND31,425 billion ($1.25 billion).