Inside a Da Nang Rubber Co (DRC) factory. The company has announced Q2 revenue up 52 percent to 1.2 trillion VND (52.2 million USD). (Photo courtesy of DRC) Theprice of natural rubber has increased sharply since the end of last year andstayed high for the first half of this year. Rubber futures prices on the Tokyoexchange also maintained a high of around 230 JPY per kilogram. This has cooledsince the end of June to 211 JPY per kilogram, but still up 32 percent over thesame period last year.
Thisdevelopment could be detrimental to the rubber tire business as rubber rawmaterials account for 70 percent of the product’s cost. However, businesses inthis industry still recorded very positive business results in Q2 thanks to anincrease in consumption volume in both domestic and export markets.
Accordingto the statistics of the Vietnam Automobile Manufacturers Association (VAMA),automobile sales reached 150,481 units, up 40 percent over the same period lastyear. Passenger cars, in particular, increased by 37 percent, commercialvehicles rose by 48 percent and specialised-purposes vehicles climbed by 68 percent.In the second quarter alone, car sales reached 79,237 units, up 11 percentcompared to the previous quarter and up 58.4 percent over the same period lastyear.
DaNang Rubber Co (DRC) – a blue-chip on the HCM City Stock Exchange – hasannounced Q2 revenue up 52 percent to 1.2 trillion VND (52.2 million USD). Itspost-tax profit was 2.2 times higher than the same period last year, reaching 106billion VND. In six months, its revenue increased 31.3 percent to 2.1trillion VND and post-tax profit was 170 billion VND, double the same periodlast year. The gross profit margins increased from 14.8 percent to 18.8 percentin the second quarter and increased from 14.8 percent to 18.6 percent over sixmonths.
Accordingto SSI Research, DRC suffered from high raw material costs in the secondquarter as natural rubber, synthetic rubber, chemicals, and blackcoal respectively increased by 26 percent, 15 percent, 8 percent and 25 percent,compared to the previous quarter. However, sale volumes of bias tiresstill rose by 34 percent and radial tires rose by 67 percent. Corporate profitmargins improved partly thanks to higher radial plant operating capacity andreduced depreciation expenses.
Theexport activities of the enterprise also prospered with a turnover of 27million USD in Q2, up 95 percent over the same period last year and up 43 percentcompared to the previous quarter thanks to the strong recovery of orders fromthe US and Brazil.
Inthe same period last year, the COVID-19 pandemic broke out strongly in thesetwo markets, causing orders to decrease. Export volume of radial tires reached128,000 units, up 90 percent and bias tires reached 78,000 units, up 160 percent.
Similarly,thanks to the expansion of consumption and export markets, the Southern RubberIndustry Joint Stock Company (CSM) recorded Q2 revenue of 1.39 trillion VND, up12 percent over the same period last year. The cost of goods sold increased to18.5 percent as consumption volume and input material prices both rose.However, thanks to cost reductions, profit after tax still rose by nearly 21 percentto 23 billion VND. In six months, the company achieved revenue of 2.47 trillionVND, up 13 percent. Profit after tax totalled 36 billion VND, up 14 percentover the same period last year.
Thisyear, CSM aims to export to a number of new markets such as South America andEastern Europe, on top of current markets including Brazil, India and the US.Export revenue in 2020 increased by 12 percent compared to the previous yearthanks to the output of radial tires, which accounted for 60 percent.
SaoVang Rubber JSC (SRC) revenue in the second quarter also increased by 16.5 percentto 240 billion VND and pre-tax profit increased slightly from 49.8 billion VNDto 50.6 billion VND.
Inthe first half of the year, its revenue reached 497 billion VND, up 24 percent.In which, export revenue rose by 31 percent to 101 billion VND. Its domesticrevenue increased 22 percent to 395 billion VND while profit after tax was theequivalent to the same period last year reaching 24 billion VND./.
VNA
