Vietnam steelmaker Hoa Sen posts 42% profit surge on margin gains despite revenue drop

Hoa Sen Group (HoSE: HSG), one of Vietnam’s largest steelmakers, reported a sharp rise in profit for the 2024-2025 financial year despite weaker sales, as improved margins and cost controls offset a challenging global steel market.

The company said consolidated revenue for the year ended September 30, 2025 fell 7% from a year earlier to VND36.5 trillion ($1.4 billion), while net profit jumped 42% to VND732 billion ($28.14 million), driven mainly by stronger gross margins.

Gross margin improved to 12.4% from 10.9% a year earlier, helping cushion the impact of lower volumes amid subdued global demand and persistent trade barriers.

In the fourth quarter, revenue dropped 17% year-on-year to VND8.36 trillion ($321.28 million), the lowest level in eight quarters. However, a rebound in gross margin to 12.2% from 8.4% lifted gross profit 20% to VND1.02 trillion ($39.25 million).

The firm posted Q4 net profit of VND85 billion ($3.27 million), reversing a loss of VND186 billion ($7.15 million) a year earlier, but marking its weakest quarterly profit of the financial year.

For the full financial year, the group exceeded its profit targets but missed its more optimistic revenue goal. Hoa Sen had outlined two scenarios, targeting net revenue of VND35 trillion ($1.35 trillion) and VND38 trillion ($1.46 trillion), with corresponding net profit goals of VND400 billion ($15.38 million) and VND500 billion ($19.22 million). As a result, actual profit surpassed the higher profit target by 46%.

As of September 30, 2025, total assets stood at nearly VND19 trillion ($730.45 million), down more than VND600 billion ($23.07 million) from the start of the financial year. Inventories accounted for the largest share at almost VND8.2 trillion ($315.24 million), down more than VND1.5 trillion ($57.67 million), reflecting reduced raw material stockpiles alongside higher finished goods and merchandise.

By segment, coated steel remained the core business, contributing VND29.23 trillion ($1.12 billion), or 80% of total revenue in the whole year, followed by steel pipes at VND5.12 trillion ($196.64 million), or 14%, and plastics at VND1.46 trillion ($56.17 million), or 4%, according to FPT Securities.

However, FPT Securities warned that exports, historically a key profit driver, are facing mounting pressure. The U.S. Department of Commerce has imposed final anti-dumping and countervailing duties on corrosion-resistant steel from Vietnam, pushing combined tariff rates on Hoa Sen’s products to more than 110% and effectively eroding competitiveness in the U.S. market.

Chairman Le Phuoc Vu earlier said the group would shift its strategic focus toward the domestic market amid global uncertainty, prioritizing expansion of its newly-launched retail subsidiary Hoa Sen Home.

HSG shares ended at VND16,250 ($0.62) each on Thursday.