Connect with us

Business

Steel producers report strong growth in profits despite COVID-19

Published

on

Hoà Phát Group’s workers checking steel inventories. Photo hoaphat.com.vn

HÀ NỘI — Despite disruptions caused by the fourth wave of the COVID-19 pandemic, steel producers still reported extraordinary profits. 

In its third-quarter financial report, Hoà Phát Group (HPG) posted a rise of 56 per cent year-on-year in revenue to VNĐ38.9 trillion (US$1.7 billion), resulting in record profit after tax of VNĐ10.35 trillion, 2.7 times higher compared to last year. 

As of September 30, the leading steel producer recorded revenue of over VNĐ105.8 trillion, up more than 60 per cent. Its profit after tax jumped 200 per cent over last year to VNĐ27.1 trillion, which exceeded 45 per cent of the year’s plan.

In the past nine months, Hoà Phát produced 6.1 million tonnes of crude steel, up 50 per cent over the same period last year. Sales of steel products reached 6.3 million tonnes during the period, up 43 per cent. Of which, construction steel sales rose 12 per cent to 2.8 million tonnes, while hot rolled coil (HRC) sales reached nearly 2 million tonnes. 

Tiến Lên Steel Group (TLH) also reported outstanding performance last quarter. 

Even though the company’s consolidated net revenue increased 1.5 per cent year-on-year to nearly VNĐ909.4 billion, its profit after tax surged more than 8.3 times to VNĐ105.5 billion. 

Tiến Lên Steel Group said that the rise in revenue was driven by higher steel prices, while low inventories resulted in a sharp drop in the cost of goods sold. During the period, the company also minimised a number of expenses, leading to a sharp gain in net profit.

In the first nine months of 2021, its revenue climbed 15 per cent to VNĐ3.28 trillion, with net profit up to VNĐ422.3 billion from just nearly VNĐ997 million in the same period last year. With the result, the company exceeded its whole year target. 

This year, Tiến Lên Steel Group set a target of VNĐ250 billion in profit after tax. 

Similarly, Thái Nguyên Iron and Steel (TIS) and Mê Lin Steel (MEL) witnessed strong growth in business results.

Thái Nguyên Iron and Steel said in its third-quarter report that the company’s net revenue jumped 46.5 per cent over last year to nearly VNĐ3.1 trillion, with net profit reaching nearly VNĐ10 billion, 25 times higher than that of last year. 

During the period, its profit from financial activities rose strongly, while interest expenses declined. 

In the first nine months, it posted an increase of 37.5 per cent year-on-year to over VNĐ9.6 trillion. Given the sharp fall in expenses and higher steel prices, its profit after tax rose 7 times over last year’s to VNĐ113 billion.

Meanwhile, Mê Lin Steel recorded a loss of 18.7 per cent in net revenue to VNĐ196 billion. But thanks to a significant cut in expenses, with financial expenses and general and administrative expenses both down more than half, its profit after tax was still 10.6 times higher than the same period last year to over VNĐ18.7 billion. 

According to Mê Lin Steel, in the third quarter, domestic steel prices rose sharply compared to the same period of 2020, while the company’s inventories were still relatively low, so profits surged. At the same time, the company also maximised production and business expenses like sales and interest expenses, and increased efficiency.

Lê Xuân, a senior trader, said that steel enterprises were likely to benefit as China was tightening its annual steel production output.

“Environmental problems and limited energy consumption are forcing Chinese enterprises to reduce output, causing a fall in the global steel supply, as China is the world’s largest steel exporter,” Xuân said.

“It will support our steel producers.”

On the stock market, HPG and TLH are listed on the Hồ Chí Minh Stock Exchange (HoSE), while MEL is traded on the Hà Nội Stock Exchange (HNX) and TIS is on UPCOM.

These stocks have gained strongly since the beginning of the year with HPG shares and TIS shares up 34 per cent and 53.2 per cent, respectively. TLH shares even jumped more than 197.3 per cent, while MEL shares rose nearly 130 per cent. 

“Steel stocks may still have room to increase thanks to the expectation of profit growth and public investment is expected to increase sharply post-pandemic,” said Xuân.

She added that the restart of real estate projects also increased demand for steel products. —

Source: https://vietnamnews.vn/economy/1063984/steel-producers-report-strong-growth-in-profits-despite-covid-19.html

Business

Exporters told to strictly comply with EU regulations to avoid losses

Published

on

The European Union has a large demand for imported agricultural products and, thanks to the EU-Vietnam Free Trade Agreement (EVFTA), Vietnamese businesses have a unique opportunity to take advantage of this.

 However, local businesses need to strictly comply with European regulations to avoid losses when exporting to the region.

Exporters told to strictly comply with EU regulations to avoid losses
The EU applies strict requirements and regulations on imported food products. — VNA/VNS Photo Vu Sinh 

For food products, the EU has strict requirements and regulations on product quality and the maximum residue level (MRL) of pesticides.

Trade counsellor Tran Ngoc Quan, head of the Vietnam Trade Office in Belgium and EU, said that most regulations across the bloc are similar when it comes to agricultural and food products.

Germany, Austria, the UK, Netherlands and Belgium do have stricter and higher MRL levels than the standard EU regulations, though these vary with different active ingredients, fresh produce and processed products.

Dang Phuc Nguyen, General Secretary of the Vietnam Fruit and Vegetable Association, said that while Vietnamese fruits and vegetables are more competitive than those from countries without a European trade agreement, exporters must focus on improving MRL levels.

Nguyen said: “If enterprises exporting to the EU do not comply with the regulations, they face the risk of increased levels of inspections, supervision and perhaps even being banned from exporting to these markets in the future.

“The EU applies these regulations very strictly. Enterprises that want to export to the EU must obtain certificates and production levels according to GlobalGAP.”

Nguyen added that violators run the risk of incurring heavy losses if they are caught.

According to the new EU regulation No 2021/1900, effective from November 23, the frequency of pesticide testing on Vietnamese herbs and fruits will increase. Of this, 50 per cent of testing will be applied to coriander, basil, mint, parsley, beans corn and pepper and 10 per cent will be applied to dragon fruit.

Nguyen said that as vegetable products in Vietnam often have pesticides, some samples and consignments will be tested for residue. The EU has also increased the frequency of testing, adding that the more enterprises violate the regulations, the more frequent inspections will be. 

He said bans on export to the EU could be applied to violators.

According to a representative of the Vietnam Pepper Association (VPA), the EU’s increase in testing will raise difficulties in exporting to the EU and will invite increased competition from other countries.

“In order to avoid violations, businesses must do better at testing products when exporting, as well as strengthening production links to create a clean and safe raw material area,” said a representative of VPA.

The EU also conducts post-inspections away from ports, so even though goods are being consumed or sold at supermarkets or shops, if they are not of good quality they can still be recalled, said Nguyen.

Using the example of a Vietnamese pepper export enterprise that was refused by Spain when its product was tested at the border gate recently, Nguyen said that if the violation was discovered when the product was already on shelves it would cause larger financial damage to the  Vietnamese exporter. 

Nguyen Minh Lien, General Director of Vinamex Company which purchases Vietnamese goods for export to the EU market, shared that some Vietnamese enterprises do not pay due attention to food safety issues. Lien added that due to the post-inspection of the EU market, some have had to pay fines and incur additional costs due to poor quality products.

In addition, Lien said some basic errors like incorrect packaging leads to products being returned or sold cheaper to other markets.

Lien noted when exporting goods to the EU, Vietnamese businesses must work closely with importers on product quality, packaging and contract inspection to avoid loss and damage.

She said supermarkets in the EU do not directly import goods from Vietnam, so local enterprises should cooperate with importers to arrange products at the warehouse before entering the retail market there.

She also suggested Vietnamese enterprises cooperate to diversify products, ensure sufficient output and take advantage of shared containers when exporting.

Considering EU customers are increasingly interested in buying products from businesses that contribute to community development and the environment, Nguyen said: “Sustainable development should be a long-term direction for export businesses in Vietnam.”

At the same time, even enterprises and manufacturers that follow the GlobalGAP requirements must pay attention to the plant protection ingredients that the EU bans or restricts, as some may be different from the GlobalGAP.

Source: Vietnam News

Source: https://vietnamnet.vn/en/business/local-exporters-must-strictly-comply-with-eu-regulations-to-avoid-losses-798131.html

Continue Reading

Business

Moody’s upgrades VPBank’s rating to Ba3

Published

on

VPBank is one of the leading banks in Việt Nam. — Photo courtesy of the bank

HÀ NỘI — Global credit rating firm Moody’s Investors Services has upgraded Việt Nam Prosperity Bank (VPBank)’s foreign currency deposits from B1 to Ba3 which is equal to the country’s rating with positive outlook.

Moody’s BCA ratings reflect the independent intrinsic strength of the issuer. This credit rating is assessed based on the macro-environment, financial profile and qualitative assessment factors. In addition to upgrading the BCA rating, Moody’s also upgraded VPBank’s long-term local and foreign currency deposit ratings, rising to Ba3.

VPBank’s credit rating was announced after the bank completed the sale of a 49 per cent stake at its VPBank Finance Company Limited (FE Credit) to SMBC Consumer Finance Co Ltd (SMBCCF), a wholly-owned subsidiary of Japan’s Sumitomo Mitsui Financial Group, Inc (SMBC Group) at the end of October. Moody’s assessed that the capital sale brought about a significant improvement in the bank’s credit profile. Notably, according to Moody’s methodology, the bank’s capital adequacy ratio (CAR) increased from 11.4 per cent at the end of September 2021 to 13.5 per cent at the end of October 2021.

In addition to the improved capital base, the bank’s outstanding business results in recent months, despite the negative impact of COVID-19 on the economy, were also highly appreciated by Moody’s. The business results in the third quarter of the year showed that VPBank’s consolidated before-tax profit reached more than VNĐ11.7 trillion (US$513 million), up 24.9 per cent over the same period last year. The parent bank’s pre-tax profit alone reached VNĐ10.8 trillion, representing 75.2 per cent year-on-year increase. The bank’s total consolidated operating income reached VNĐ33.2 trillion, increasing 17.3 per cent over the corresponding period last year. Its consolidated return on assets (ROA) and return on equity (ROE) indices continued to be among the top of the market, reaching 2.8 per cent and 21.6 per cent respectively.

Moody’s believed that VPBank’s capital capacity will continue to be stable, as the bank has clearly demonstrated its plan to use capital obtained from the FE Credit deal to promote growth and seek new business investment opportunities. In addition, the assets scale will be further expanded thanks to the profit growth from business activities.

“VPBank’s asset quality and profitability will remain stable over the next 12-18 months,” Moody’s said in the announcement, emphasising the belief that VPBank’s asset quality will be well under control as Việt Nam’s economy recovers and vaccination rates increase.

The upgraded ratings from a prestigious international credit rating agency like Moody’s in the context that Việt Nam’s economy has suffered heavy impacts from the outbreak of the COVID-19 pandemic, has demonstrated confidence of international organisations in VPBank’s capital base and development plan this year and in the future. This also contributes to strengthening VPBank’s position, while further enhancing its ability to mobilise capital from reputable financial institutions. —

Source: https://vietnamnews.vn/economy/1092062/moodys-upgrades-vpbanks-rating-to-ba3.html

Continue Reading

Business

Rural groceries change business strategy as they compete with foreign supermarkets

Published

on

Thanh Ngoc, the owner of a grocery store, was seen comparing the prices of thousands of products with a smartphone.

Rural groceries change business strategy as they compete with foreign supermarkets

Just after a touch on the screen, a truck carrying goods worth tens of millions of dong arrived after some minutes.

Ngoc has been running a grocery in Bien Hoa City of Dong Nai province for many years. Previously, she met wholesalers every weekend to buy goods but now stays at home and places orders. All the products she needs, from toothpaste to shampoo to drinks, are delivered to the door.

“Now I can manage a shopping list with hundreds of items worth tens of millions of dong. I can analyze the purchases of local people in different periods to determine how many products I need for retail and adjust business plans,” she said.

The other two grocery stores in the same area have also been digitized. The digitization allows them to get hundreds of products from suppliers in one order within a day.

The tendency of going online is growing throughout the country. Traditional grocery stores are becoming one of the two B’s in B2B (Business to Business) in the distribution chain.

Nguyen Minh Hanh from Telio Vietnam, an e-commerce platform with retail agents in 26 cities and provinces, said the online trend will continue. The flow of people leaving large cities for hometowns after the pandemic is expected to increase goods consumption in rural areas and provinces with smaller populations.

Vo Duy Phu from VinShop said the strong development of technological platforms plus the pandemic have accelerated digitization in the retail industry.

For many of the 80,000 grocery owners, this is the first time they are using smartphones to make transactions, thus creating a revolution in the retail industry.

Online groceries are becoming common in every neighborhood as they benefit both sellers and buyers.

A representative from VinShop said with the support of technology, goods can circulate faster from manufacturers to consumers, and the problems of traditional retail can be settled with digital technology.

“One-touch purchases can help restrict contact during the pandemic. You can stay at home and compare the prices of thousands of products. Goods are delivered door to door. These are the values that digitization brings,” Phu said.

A Nielsen’s report showed that Vietnam has more than 1.4 million grocery stores and 9,000 traditional markets. 

Tran Chung

Source: https://vietnamnet.vn/en/business/rural-groceries-change-business-strategy-as-they-compete-with-foreign-supermarkets-798186.html

Continue Reading

Trending