Vietnamese rice firms report profit declines in 2022 despite record-breaking exports

Although export turnover broke a record, many Vietnamese rice exporters saw their profits decline last year due to high costs.

Agricultural services and food conglomerate Loc Troi Group JSC recorded net revenue of over VND11,690 billion ($495.95 million), up 14% year-on-year and the highest in its history.

This increase mainly comes from food products at more than VND6,430 billion ($272.79 million), up nearly 60%.

However, the company's financial expenses increased sharply by nearly 50%, mainly due to interest expenses, and cost of sales rose by 15% to more than VND9,500 billion ($403.04 million), so its after-tax profit dropped slightly by 1% to more than VND412 billion ($17.48 million).

Another large rice exporter, Trung An Hi-Tech Farming JSC reported net revenue of nearly VND3,800 billion ($161.21 million), up 22%, the highest revenue since 2016.

However, cash flow from business and investment activities of Trung An was negative over VND700 billion ($29.69 million), 1.7 times year-on-year due to inventories increasing sharply by nearly 40% to VND1,410 billion ($59.82 million) and short-term receivables doubling to about VND624 billion ($26.47 million).

The company had to borrow an additional VND1,590 billion ($67.45 million), up 21% compared to the beginning of the year, most of which was short-term debt.

Trung An's after-tax profit decreased by nearly 28% compared to 2021 to VND70 billion ($2.97 million).

Meanwhile, according to information at its 2022 review conference, leading rice exporter Vietnam Northern Food Corp. (Vinafood 1) was estimated to achieve revenue of about VND16,170 billion ($686 million), fullfilling 106% of its plan.

Vinafood 1's after-tax profit reached VND283 billion ($12 million), a slight increase of 2% compared to 2021.

In the opposite direction, leading rice exporter Vietnam Southern Food Corp. (Vinafood 2) recorded net revenue of VND17,304 billion ($734.12 million), up slightly by 4% and after-tax profit of VND22.6 billion ($958,804), while the same period last year saw a loss VND324 billion ($13.75 million). Last year was also the first year Vinafood 2 had seen a profit in five years.

In 2022, Vietnam exported more than 7.2 million tons of rice, with a turnover of nearly $3.5 billion, up 16% in volume and more than 6% in value compared to 2021. This is the highest turnover in 15 years, helping Vietnam firmly maintain its position among the top three largest rice exporting countries in the world.

The Mekong Delta is the country’s rice bowl, and most of Loc Troi Group’s rice business is in the delta.