Rising steel prices, good management of inventory and costs helped businesses in this industry improve business results compared to the end of last year.
Consolidated revenue in the first quarter of Hoa Phat Group (HPG) – which holds about a third of the construction steel market share – increased by only 3% but broke the circuit of losses for two consecutive quarters with a profit of more than 380 billion dong. Which, in the field of steel production and related products, is still the mainstay, contributing 94% to this profit.
Similarly, Vietnam Steel Corporation (VNSteel – TVN) recorded a 3% increase in revenue and a positive profit of nearly 70 billion dong. Previously, this business had three consecutive quarters of business below cost. Hoa Sen Group (HSG) has a profit of more than 250 billion dong, interrupting the loss for two consecutive quarters.
The steel industry’s profit improved compared to the end of last year, which is mainly explained by enterprises’ internal management solutions. According to Hoa Phat, demand has not improved in the first quarter. Therefore, the company has positive business results due to effective management of inventory, raw materials and sales according to market movements. With Hoa Sen, the company managed its recurrent expenses well, reducing them by over 40% compared to the same period last year.
In fact, in the first quarter, according to the Vietnam Steel Association (VSA), sales of finished steel reached over 6 million tons, down more than 25% over the same period, export alone decreased by 9%. While finished steel production has decreased by 21%, the difference between consumption and production is still more than 600,000 tons.
The demand decreased, but thanks to the continuous increase in steel prices in the first three months of the year, it contributed positively to the business results of enterprises. From a price range of around 15 million dong per ton with CB240 coil and CB300 D10 rebar, big brands gradually raised the selling price to 16 million dong. Hoa Sen’s leaders once estimated in the annual meeting that the company’s profit recovered well from February and could reach VND 50 billion in the first quarter thanks to the rebound in steel prices, while the actual number is more than 250 billion VND.
Forecasting the future, leaders of large steel enterprises share the same positive opinion. Hoa Phat Chairman Tran Dinh Long said that although the difficult period of the steel industry has passed, the internal strength of the industry is still good. However, in the coming time, the recovery will completely depend on the demand, which is still low. Similarly, the Chairman of Hoa Sen Group said that the worst time in the steel industry has passed, and the company also ran out of high-priced inventory.
In April, many units adjusted steel prices 2-3 times in a row. Currently, each ton has decreased by about one million dong, about 15 million dong. This is expected to stimulate market demand. But the real estate industry’s difficulties remain, continuing to be an obstacle to the steel industry’s
