Profits of steel enterprises plummeted

In which only Hoa Phat has a member, Hoa Phat Hai Duong Steel Joint Stock Company ranked 23rd, in the top 30 largest corporate income tax payers, Hoa Phat Steel Pipe ranked 121. In addition, there are 8 Other member companies of Hoa Phat are on the list of V.1000. Hoa Phat's corporate income tax amount in 2020 is VND 1,717 billion, an increase of 11% compared to 2019. In 2021 it is VND 2,743 billion, an increase of 60% compared to 2020. In the first 6 months of 2022, Hoa Phat's corporate income tax amount will reach 853 billion.

However, entering the third quarter of 2022, the business results of steel enterprises are showing signs of sharp decline compared to the first half of the year and two years ago. The gloomy business outlook is showing in the business results of many steel companies. Specifically, Thai Nguyen Iron and Steel Company (Tisco) had a loss of 25 billion dong in the third quarter (the same period with 10 billion dong profit). This result is due to the lower consumption volume of 21,895 tons (down 11%) compared to the same period last year leading to a 15% decrease in revenue to VND 2,600 billion.

Similarly, Vicasa Vnsteel also reported a 17% drop in net sales to VND477 billion. The company suddenly had a net loss of 22 billion dong (it was still 2 billion in the same period) and was the heaviest quarter since 2009. This led to the 9-month accumulated profit turning back to negative 12 billion dong. The reason is that low consumption volume, rapid decrease in selling prices, high inventory prices and rapid increase in financial costs have led to the above dismal results. As for Thu Duc Steel, Vnsteel still saw a slight increase in revenue of 2% to VND 412 billion in the third quarter, but due to the plunge in steel prices and a sharp increase in financial costs, the company suffered a loss of VND 22 billion, the biggest loss since upon equitization.

Even with Hoa Phat, the sales report for the period of July-September only reached 1.71 million tons of finished products, 16% lower than the same period last year. Hoa Phat explained that the general market demand was low in September, combined with complicated rainstorms, making it difficult to consume construction steel.

Therefore, according to a preliminary estimate of SSI Research, Hoa Phat's profit in this period may only reach about VND 2,100 billion, down 80% compared to the peak of the third quarter of 2021 due to falling steel and coal prices. The input cup goes up, with the same exchange rate loss.

Labor