Vietnam wood majors report Q1 profit plunge

Vietnam's major wood producers Phu Tai, An Cuong, Truong Thanh, and Duc Thanh reported a plunge in profits in the first quarter of this year amid declining orders.

Phu Tai JSC recorded after-tax profit of VND62.4 billion ($2.66 million) in Q1, down 57% year-on-year.

The company, listed on the Ho Chi Minh Stock Exchange (HoSE) as PTB, earned net revenue of VND1.41 trillion ($60 million), down 18%.

The company said revenue fell due to inflation in the European and U.S markets, affecting purchasing power. The decline in the Vietnamese real estate market from Q2/2022 has also affected its business results of Q1/2023.

As of March 31, the company's assets had reached VND5.13 trillion ($218.59 million), down 2% from the beginning of the year, of which inventory hit VND1.69 trillion ($71.9 million), down 4%.

In 2023, Phu Tai expects a revenue of VND7.23 trillion ($308 million), up 3%, but pre-tax profit down 10% to VND550 billion ($23.45 million).

PTB shares finished at VND46,000 ($1.96) at Tuesday's close.

Meanwhile, An Cuong Wood Working JSC posted after-tax profit of VND36.3 billion ($1.55 million) and net revenue of VND680 billion ($28.99 million), down 70% and 20% respectively.

The company (ACG) said that its profit decreased compared to the same period last year as the complicated economic situation in the country and in the world made consumers cautious in spending and selling expenses increased due to the company actively expanding its distribution system.

By the end of Q1, the company's assets had reached VND5.27 trillion ($224.47 million), down 3% compared to the beginning of the year. Notably, cash and cash equivalents hit VND32.1 billion ($1.36 million), down 92%.

An Cuong aims to achieve revenue of VND5 trillion ($213.17 million) this year, up 11.7%, and post-tax profit of VND668 billion ($28.48 million), up 8.5%.

On the HoSE, the ACG share price stood at VND39,200 ($1.67) per unit at Tuesday's close.

Another wood giant, Truong Thanh Furniture Corporation reported after-tax profit of VND1.8 billion ($76,700), down 90% year-on-year.

The company earned net revenue of VND331 billion ($14.11 million), down 38%.

As of the end of March, the company's assets had hit VND3.05 trillion ($130 million), of which short-term assets were VND1.99 trillion ($84.84 million).

In 2023, Truong Thanh sets a revenue plan of VND2.22 trillion ($94.73 million), up 10.3% compared to 2022 and after-tax profit of VND54 billion ($2.3 million), up 14.86 times.

On the HoSE, the TTF closed at VND4,680 ($0.2) on Tuesday.

Duc Thanh Wood Processing JSC recorded net revenue of VND60 billion ($2.55 million), down 44%, and after-tax profit of VND7.5 billion ($319,800), down 63%.

As of March 31, 2023, the company's total assets had stood at VND393 billion ($16.75 million), of which cash and cash equivalents were VND13.6 billion ($579,800), down 30% compared to the beginning of the year.

Duc Thanh is listed on the HoSE as GDT, which closed at VND29,650 ($1.26) on Tuesday.

In 2023, the company aims at a revenue of VND520 billion ($22.17 million) and post-tax profit of VND83 billion ($3.54 million), up 30% and up 20% respectively.

In the first three months of 2023, the export of wood and wood products reached $2.88 billion, down 28.3% compared to the same period in 2022, according to the General Department of Vietnam Customs. In which, the export turnover of wooden furniture only reached $1.87 billion, down 38.5% year-on-year.

Do Xuan Lap, chairman of Vietnam Timber & Forest Products Association said that due to the sharp decline in global purchasing power, the world economy faced difficulties and challenges, leading to a sharp decrease in the number of orders for the wood industry compared to the same period in 2022.

According to Lap, the U.S, the main export market for the wood industry, saw a sharp decline that directly affected the overall export results.

He said, from 2022, many businesses have searched for customers in new markets like Japan, China and South Korea to offset the decline from the main markets.

"In the second quarter, the wood industry's orders are expected to drop more sharply, in the third and fourth quarters, the market will improve due to the beginning of the commodity season. We expect this year's wood export turnover will be the same level as last year," he added.