Products loaded on a truck at a warehouse of Hoa Phat Group (Photo: hoaphat.com.vn) Giant steel maker Hoa Phat Group (HPG) recorded a net loss of more than 2 trillion VND (85.3 million USD) in the fourth quarter, a new bottom after the third quarter where it recorded a loss of nearly 1.8 trillion VND.
In the last quarter of last year, the group's revenue also decreased by 42% over the same period of the previous year, to 26 trillion VND. In the whole of 2022, Hoa Phat Group recorded revenue of 142 trillion VND, down 5% year-on-year. Profit after tax for the whole year reached more than 8.4 trillion VND, only one-fourth of that in 2021.
In the fourth quarter of 2022, Hoa Sen Group (HSG) suffered a loss of 680 billion VND, down from 887 billion VND in the third quarter of 2022. The Vietnam Steel Corporation (TVN) reduced its loss from 567 billion VND in Q3 to 410 billion VND in Q4. Nam Kim Group (NKG) and Tisco (TIS) also reduced their losses compared to the previous quarter, reaching 356 billion VND and 17 billion VND, respectively.
The decrease in consumption volume combined with the continuous decline in prices significantly affected the revenue of steel enterprises. According to data from the Vietnam Steel Association (VSA), total steel product consumption in 2022 reached 27.3 million tonnes, down 7.2% compared to 2021. Total exports were 6.28 million tonnes, down nearly 20%.
Construction steel was the only item that recorded a slight increase in output by 3% over the same period of the previous year. Meanwhile, consumption of galvanised steel decreased by 22% mainly due to the weakening of the export market, down by 38%. Sales of products of galvanised steel and steel pipes declined, causing the output of hot rolled coil (HRC) to decrease by more than 13%.
Although continuing to report losses, Hoa Phat is quite optimistic about the situation of the steel industry this year. The group said that "the steel industry has gone through the most difficult period and is on the way to recover" and is closely monitoring market developments to adjust production and business activities flexibly. Hoa Phat's steel sales volume increased again in the last month of 2022 after many previous decreases.
According to Kallanish, Hoa Phat has restarted a blast furnace in Hai Duong and increased its bar steel capacity by 700,000 tonnes per year. This is also a signal that the situation of the construction steel market has improved. Previously, Hoa Phat closed three blast furnaces in the last two months of 2022. The company also continues to invest in Hoa Phat Dung Quat 2 Iron and Steel Production Complex.
According to the forecast of the World Steel Association (Worldsteel), global steel demand is estimated to decrease by 2.3% in 2022 but will increase by 1% in 2023 and reach 1,815 million tonnes. The reopening of China will help the resumption of construction activities and boost infrastructure investment, thereby helping construction steel demand recover. Increased industrial demand in the country will also help restore global supply chains. Steel selling price is also expected to increase again.
Rebar prices in China have recovered 19% and are trading at their highest levels since mid-August last year. Meanwhile, the prices of coal - the most important material in steelmaking, have leveled off and shown signs of falling. This will probably support the profit margin of the steel industry in the future.
In addition, the Government stepping up investment in infrastructure projects with the goal of ensuring economic growth in 2023 may support domestic steel demand, especially construction steel. However, the real estate industry, after a quiet year in 2022, is not expected to recover in 2023, which will partly affect the recovery of domestic steel demand./.
VNA
