Strong Performers in Steel Industry despite Raging Pandemic

1:48:26 PM | 26/8/2020

In the first half of 2020, most businesses and industries are hard hit by the Covid-19 pandemic. The steel industry is one of the most affected industries as many projects are being delayed, or even stopped, by social distancing and other factors.

Many steelmakers report year-on-year profit growth

Within listed steelmakers, Hoa Phat Group (HPG) and Hoa Sen Group (HSG) were among a few growing businesses in the reviewed period.

Some companies saw a profit decline from a year-ago period, including Nam Kim Steel (NKG), Vietnam Steel Corporation (TVN), SMC, Vietnam Italy Steel (VIS), Thai Nguyen Steel (TIS), Thong Nhat Flat Steel (TNS) or Vietnam Germany Steel Pipe (VGS). However, many reported losses, like Pomina Steel (POM), Tien Len Steel (TLH) and Dana Y Steel (DNY).

Among profit-making steelmakers in the second quarter of 2020, Vietnam Italy Steel remarkably made a profit after eight straight quarters of loss, trimming its loss to VND16 billion in the first half of the year, much lower than the net loss of nearly VND66 billion a year ago. Its total accumulated loss was VND561 billion as of June 30, 2020. Currently, Viet Italy Steel has a share premium of VND123 billion, an investment and development fund of more than VND173 billion and the owner’s equity of nearly VND9 billion.

Notably, Pomina Steel Corporation (POM) posted a loss of more than VND88 billion in the second quarter, the 6th consecutive quarter it ran a loss, bringing its accrued loss to nearly VND166 billion. In the first half of 2020, the steelmaker suffered a loss of VND144 billion.

Q1 versus Q2 performance

By growth performance in the first quarter of 2020, Hoa Sen Group was the best performer, growing by nearly 500%. In fact, the March quarter is the second quarter of its financial year when the steelmaker reported a profit of more than VND53 billion, while it posted an after-tax profit of more than VND318 billion in this quarter.

Despite the Covid-19 epidemic, some steelmakers still reaped strong profit growth, with some posting nearly double growth from a year ago.

The second best performer by profit growth was Hoa Phat Group (HPG ), which made a net profit of VND2,755 billion in the second quarter, plus VND1,810 billion in the March quarter, totaling VND5,060 billion in the first half on net revenue of VND39,654 billion. HPG announced completing 46% of its annual revenue plan and 56.2% of profit plan.

Other profit-growing companies in the first quarter included SMC, Tisco and Thong Nhat Flat Steel Joint Stock Company (TNS). TNS changed from loss making in the first quarter to profit making in the second quarter, although the earnings were less than VND2 billion. Dana Y Steel Joint Stock Company (DNY) saw a loss of VND38.7 billion, down VND18 billion from the first quarter.

The rest witnessed lower second-quarter profit than first-quarter earnings. Pomina Steel posted a loss of more than VND88 billion, compared to a VND35.7 billion loss in the first quarter. VnSteel saw a 19% decline in profit, from VND77.6 billion to VND63 billion between the two quarters.

Source: Vietnam Business Forum