Production chain at the Hoa Phat Steel Jsc. in Hai Duong province (Source: VNA) Hanoi (VNA) - Despite stagnation in the second quarter of 2017, Vietnam’ssteel industry managed to turn a profit in the first seven months of the year,led by a rebound in construction and real estate demand.
According to reports released by the Vietnam Steel Association (VSA), thedomestic steel market in the first seven months of 2017 grew significantly fromthe same period last year. In particular, 9.5 million tonnes of steel wasproduced, with 7.8 million tonnes sold domestically, both increasing 11.7 percent.
Nonetheless, individual businesses reported second-quarter income below thesame period in 2016, including the Tienlen Steel Corporation with income of178.8 billion VND (7.9 million USD), down 30 percent year-on-year and the ThaiNguyen Steel Corporation at 83.34 billion VND (3.7 million USD), down nearly 48percent.
In total, accumulated post-tax income for Vietnam’s steel industry in Q2 of2017 was 1.916 trillion VND (85.4 million USD), down 32 percent from 2016.
Few firms reported an increase in revenue in the period, with one example theVietnam – Italy Steel JSC recording more than 3.9 billion VND (173,843 USD), 70percent higher than 2016’s number.
At least 76 steel making firms noted in their financial report for the secondquarter of 2017 that their post-tax income fell, including big names like HoaPhat Steel JSC or Nam Kim Steel JSC.
The drops can be attributed to exchange rate fluctuations and hikes in cost,pushing output prices higher, explaining the fall in revenue despite theproduction increases.
For instance, SMC Trading Investment Joint Stock Company reported a 40 percentincrease in selling price, with revenue falling 73 percent to 45 billion VND (2million USD) from 2016’s second quarter.
Similarly, the Vietnam – Germany Steel JSC suffered from a change in exchangerate between Vietnamese dong and US dollar, as it increased from 22,275 VND perone dollar in 2016 to 22,750 VND in 2017, making the company’s revenue drop 50 percentto 12 billion VND (534,902 USD) in the second quarter of 2017.
However, thanks to many firms earning big in the first quarter of 2017, with atleast nine steel producers reporting an increase in revenue of up to 600 percentfrom 2016’s first quarter, the total accumulated post-tax revenue for the firstsix months of 2017 reached 4.3 trillion VND (193.6 million USD), an increase of9 percent from the same period in 2016.
The VSA report also cited the introduction of the Ministry of Industry and Trade’ssafeguard measures for Vietnamese steel industry driving the rise in productionand selling steel and steel related products.
Nguyen Van Sua, VSA Vice Chairman, said at a conference earlier this year thatin the next five years, the growth rate for the steel industry will hit 12 to15 percent annually, with the rest of 2017 set for rising productivity.
However, the VSA warned of the need for higher technology products, and animproved intersectoral value chain, diversified products and more efficiency tocut costs and help export competitiveness.-VNA
According to reports released by the Vietnam Steel Association (VSA), thedomestic steel market in the first seven months of 2017 grew significantly fromthe same period last year. In particular, 9.5 million tonnes of steel wasproduced, with 7.8 million tonnes sold domestically, both increasing 11.7 percent.
Nonetheless, individual businesses reported second-quarter income below thesame period in 2016, including the Tienlen Steel Corporation with income of178.8 billion VND (7.9 million USD), down 30 percent year-on-year and the ThaiNguyen Steel Corporation at 83.34 billion VND (3.7 million USD), down nearly 48percent.
In total, accumulated post-tax income for Vietnam’s steel industry in Q2 of2017 was 1.916 trillion VND (85.4 million USD), down 32 percent from 2016.
Few firms reported an increase in revenue in the period, with one example theVietnam – Italy Steel JSC recording more than 3.9 billion VND (173,843 USD), 70percent higher than 2016’s number.
At least 76 steel making firms noted in their financial report for the secondquarter of 2017 that their post-tax income fell, including big names like HoaPhat Steel JSC or Nam Kim Steel JSC.
The drops can be attributed to exchange rate fluctuations and hikes in cost,pushing output prices higher, explaining the fall in revenue despite theproduction increases.
For instance, SMC Trading Investment Joint Stock Company reported a 40 percentincrease in selling price, with revenue falling 73 percent to 45 billion VND (2million USD) from 2016’s second quarter.
Similarly, the Vietnam – Germany Steel JSC suffered from a change in exchangerate between Vietnamese dong and US dollar, as it increased from 22,275 VND perone dollar in 2016 to 22,750 VND in 2017, making the company’s revenue drop 50 percentto 12 billion VND (534,902 USD) in the second quarter of 2017.
However, thanks to many firms earning big in the first quarter of 2017, with atleast nine steel producers reporting an increase in revenue of up to 600 percentfrom 2016’s first quarter, the total accumulated post-tax revenue for the firstsix months of 2017 reached 4.3 trillion VND (193.6 million USD), an increase of9 percent from the same period in 2016.
The VSA report also cited the introduction of the Ministry of Industry and Trade’ssafeguard measures for Vietnamese steel industry driving the rise in productionand selling steel and steel related products.
Nguyen Van Sua, VSA Vice Chairman, said at a conference earlier this year thatin the next five years, the growth rate for the steel industry will hit 12 to15 percent annually, with the rest of 2017 set for rising productivity.
However, the VSA warned of the need for higher technology products, and animproved intersectoral value chain, diversified products and more efficiency tocut costs and help export competitiveness.-VNA
VNA
