Vietnam’s major steel producers report Q2 profit plunge

Three of the nation’s steel majors - Hoa Phat Group, Hoa Sen Group and Nam Kim - have reported significant profit declines in the second quarter of this year, while Vnsteel has posted a loss.

Vietnam's largest steel producer Hoa Phat Group recorded a post-tax profit of VND1.45 trillion ($61.2 million) in Q2, down 64% year-on-year.

Hoa Phat, listed on the Ho Chi Minh Stock Exchange (HoSE) as HPG, earned net revenues of VND29.8 trillion ($1.26 billion) in the period, down 21%.

In the first six months of 2023, HPG reported net revenues of VND56.67 trillion ($2.39 billion) and after-tax profits of VND1.83 trillion ($77.3 million), down 30% and 85% year-on-year, respectively.

Hoa Phat sold 2.9 million tons of construction steel, billets and hot-rolled coils (HRC) in the first half of the year, down 27% year-on-year.

The group said it will focus this year on investing in the Hoa Phat Dung Quat 2 Steel Integrated Complex project in the central province of Quang Ngai, and on restarting production at plants in Quang Ngai and the northern province of Hai Duong to ensure sufficient inventory.

As of June 30, HPG's total assets had stood at VND176.29 trillion ($7.45 billion), up 3% compared to the beginning of the year, with cash and cash equivalents at VND13.25 trillion ($559.7 million), up 59%.

Hoa Phat has targeted revenues and after-tax profits of VND150 trillion ($6.29 billion) and VND8 trillion ($591,279) this year, up 6% and down 5% year-on-year, respectively.

HPG shares closed Friday at VND28,300 ($1.19).

Meanwhile, Hoa Sen Group, Vietnam's leading steel sheet producer, posted net revenues of nearly VND8.65 trillion ($365.2 million) and after-tax profits of nearly VND14 billion ($464,200) in April-June, the third quarter of its 2022-2023 fiscal year, down 29% and down 94% year-on-year, respectively.

In the first nine months of its fiscal year (October 2022-June 2023), Hoa Sen suffered a total loss of VND410 billion ($17.3 million) on net revenues of VND23,544 billion ($993.63 million), down 44%.

At the end of June, the group's assets had stood at VND16.53 trillion ($697.9 million), down 3% compared to the beginning of the year, with inventories at VND6.25 trillion ($263.9 million), down 15.5%.

The group has set a target of VND34-36 trillion ($1.44-1.52 billion) in revenue and an after-tax profit target of VND100-300 billion ($4.22-12.67 million) for the 2022-2023 fiscal year.

It aims to sell 1.5-1.6 million tonnes of steel of all kinds in the fiscal year that started October 1, 2022, Hoa Sen said.

On the HoSE, HSG closed Friday at VND19,300 ($0.82) per share.

Nam Kim Steel, another major steelmaker in the country, posted Q2 after-tax profits of VND125 billion ($5.2 million) and net revenues of VND5.5 trillion ($232.3 million), down 37% and 23% year-on-year, respectively. Notably, Nam Kim’s Q2 profit followed three consecutive quarters of losses.

In the first half of 2023, the company recorded net revenues of VND9.88 trillion ($417 million) and after-tax profits of VND76 billion ($3.2 million), down 31% and 89% respectively.

At the end of Q2, NKG's total assets had stood at VND12.18 trillion ($514.4 million), down 9.5% compared to the beginning of the year, with cash and cash equivalents at VND1.08 trillion ($45.78 million).

For the whole of 2023, Nam Kim Steel has targeted revenues and pre-tax profits of VND20 trillion ($844.7 million) and pre-tax profits of VND400 billion ($16.8 million), respectively.

Nam Kim Steel, listed on the HoSE as NKG, closed Friday at VND19,800 ($0.84) per share.

Meanwhile, heavyweight Vietnam Steel Corporation (Vnsteel) reported a Q2 loss of VND284 billion ($11.99 million) in Q2, compared to a loss of VND40 billion ($1.69 million) in the same period the previous year.

Its Q2 revenue of VND6.75 trillion ($285.2 million) marked a year-on-year decrease of 29%.

In the first six months of 2023, Vnsteel posted net revenues of VND15.1 trillion ($637.6 million) and after-tax loss of VND216 billion ($9.1 million). In the same period last year, it had made a profit of VND155 billion ($6.5 million).

Vnsteel's largest shareholder is the State Capital and Investment Corporation (SCIC), which holds a 93.93% stake. The corporation is listed on the Unlisted Public Company Market (UpCOM) as TVN.

As of June 30, 2023, the firm's total assets had stood at VND23.37 trillion ($987 million), up 5% compared to the beginning of the year, with cash and cash equivalents at VND1.51 trillion ($63.7 million) and inventories at more than VND4.66 trillion ($196.7 million).

The corporation closed Friday at VND7,900 ($0.33) per share.