Inside a billet mill of Pomina Steel in Phu My I Industrial Park, Ba Ria - Vung Tau province. (Photo: VNA) In its third quarter financial statement, Pomina Steel Corporation (POM) saidthat its net profit dropped 78 percent on-year to 3.5 billion VND (153,267 USD).However the company’s consolidated net revenue still rose 38.9 percent to 3.1trillion VND.
Meanwhile, due to the complexity of the COVID-19 outbreak in southern localitiessuch as HCM City, Binh Duong and Ba Ria - Vung Tau, constructionconsumption also stopped, resulting in lower prices. Moreover, extra costs dueto the “three-on-site” model triggered a decline of 14.7 percent in grossprofit to 119.7 billion VND. Its gross profit margin inched down to 3.8 percentfrom 6.3 percent.
The company's revenue growth was boosted by exports with revenue of 1.9trillion VND, 4.5 times higher than the same period last year.
The strong rise in exports offset the decline in domestic consumption that wasdown 55 percent.
For the first nine months of the year, Pomina recorded net revenue of 9.6trillion VND, up nearly 32 percent over last year, while posting a profit aftertax of 205.9 billion VND. In the same period last year it lost 127.8 billion VND.
This year, the company set a target of 12 trillion VND in revenue and 600billion VND in profit after tax. Thus, after nine months, it respectivelycompleted 80.35 percent of the revenue target and 34.3 percent of the profit target.
Other steel enterprises operating in the south also recorded a sharp drop inbusiness results in the third quarter as both consumption and production wereseriously hit by the pandemic.
Of which, Thu Duc Steel JSC (TDS) in its financial statement reported a netloss of 643.7 million VND, while in the same period last year it posted a netprofit of nearly 2.2 billion VND.
The fall was due to losses of 31.8 percent year-on-year in net revenue, whileproduction costs increased sharply. Because of the pandemic, it could onlyarrange the “three-on-site” for one production shift. Therefore the productioncost was very high, while output was low.
The company's production cost climbed sharply because of rising debts,transportation costs, and raw material costs.
Vietnam- Italy Steel JSC (VIS) also suffered a net loss of 92.3 billion VND inthe third quarter of 2021, despite an 18.4 percent increase in net revenue. Inthe same period of 2020 it recorded a profit of 26.7 billion VND.
The reason was the sharp rise in cost of goods sold, up 30.9 percent over lastyear, eroding the company’s profit. In addition, financial revenue decreased by42.2 percent while interest expenses jumped by 21.6 percent.
As of September 30, the company still witnessed a net loss of 18.6 billion VND althoughnet revenue rose 56.1 percent year-on-year.
It explained that the implementation of the COVID-19 prevention measures inmany localities had delayed construction activities, freezing the output ofsteel products. Both its billet and steel mills had to stop operatingat times, but the company still paid fixed costs.
Also adding to the pressure, the prices of raw materials increased whilethe company could not sharply raise the price of semi-finished products, andinventories rose sharply, causing the company to pay extra costs for holdinggoods.
Similarly, the financial statements of Vicasa (VCA) showed that its profitafter tax slid 48 percent in the third quarter of 2021, while revenue onlydecreased by 4 percent.
On the contrary, leading steel producers still performed well during the periodthanks to strong export demand and higher global steel prices.
Hoa Sen Group (HSG) posted an increase of 89 percent in revenue and double inprofit. While Hoa Phat Group (HPG)’s profit was 2.73 times higher than the sameperiod last year./.
VNA
