In Q1, Thái Nguyên Iron And Steel JSC (TIS) witnessed its profit down by 35 per cent, to only VNĐ29.2 billion. — VNA/VNS Photo 

HÀ NỘI — The cost of raw materials and transportation fees have skyrocketed, causing the first-quarter profits of most steel companies to decline.

Data from the Việt Nam Steel Association (VSA) showed that in the first quarter of this year, finished steel consumption reached 8.137 million tonnes, up 11.9 per cent over the same period in 2021.

Of the estimate, steel exports reached about 2.275 million tonnes, with export value reaching US$2.3 billion, decreasing by 22.15 per cent in volume but up by 12.53 per cent in value over the same period last year. However, the business performance of many enterprises in the industry did not move in the same direction.

The first-quarter business results report of Việt Nam Steel Corporation (TVN) showed a sharp decline in profit at member units, especially in the construction steel and galvanised steel segments.

In the construction steel segment, Southern Steel One Member Co. Ltd. reported a profit before tax of VNĐ5 billion ($216,500), only equal to 7 per cent of the same period last year.

VNSTEEL – VICASA JSC (VCA) pre-tax profit reached VNĐ11.1 billion, down 21.76 per cent while VNSTEEL – Thủ Đức Steel JSC (TDS) made a profit of more than VNĐ8 billion, down 37.21 per cent over the same period last year.

In the galvanised sheet segment, Thái Nguyên Iron And Steel JSC (TIS) also witnessed its profit down by 35 per cent, to only VNĐ29.2 billion. Việt Thắng Corporation (code TVT) recorded a profit of only VNĐ73 million, while in the same period last year, the figure was VNĐ27.6 billion. Phưong Nam Steel Sheet Company also saw a 23 per cent drop in profit to reach VNĐ30.1 billion.

Việt Nam Steel Corporation attributed the profit decline of many of its members to the world's economic and political volatility, especially the influence of the Russia-Ukraine conflict that had pushed up the prices of input materials in the steel industry, such as iron ore, coal, gas and increased freight costs.

Tiến Lên Steel Group Joint Stock Company (TLH) achieved revenue of VNĐ1.8 trillion in the first quarter, up 83 per cent over the same period, but profit after tax reached VNĐ86.3 billion, down 27 per cent over the same period last year.

Backward goals in 2022

Việt Nam Steel Corporation targets this year's revenue to reach VNĐ38 trillion, a pre-tax profit of VNĐ500 billion, down 6.4 per cent and 51.6 per cent, respectively, compared to 2021.

VNSTEEL – VICASA JSC (VCA) sets its after-tax profit target at VNĐ16.56 billion, down nearly 55 per cent compared to 2021. VCA's cautiousness comes from the declining steel price forecast in 2022, and competition in the market is expected to be more fierce.

VNSTEEL – Thủ Đức Steel JSC (TDS) set a profit after tax target this year of more than VNĐ19 billion, down 56 per cent compared to the performance in 2021.

Thái Nguyên Iron And Steel JSC (TIS) set a revenue target of VNĐ20.10 trillion this year, up 56 per cent compared to the previous year, and profit before tax of VNĐ110 billion, a decrease of 29.4 per cent.

Tiến Lên Steel Group Joint Stock Company (TLH) set a target of a total revenue of VNĐ5.5 trillion, an increase of 18 per cent compared to the revenue last year, and profit after tax of VNĐ300 billion, down 35 per cent compared to the profit achieved in 2021. Thus, by the end of the first quarter, TLH has fulfilled 28 per cent of the profit target and 32 per cent of the revenue target.

Hoa Sen Group (HSG) predicts three business scenarios for this year, in which the planned output is two million tonnes and the revenue is VNĐ46.4 trillion for all three scenarios. For the profit target, there are three scenarios: VNĐ1.5 trillion, VNĐ2 trillion and VNĐ2.5 trillion, depending on the price of input materials.

HSG this year’s targets recorded a decrease of 11.1 per cent in output, nearly a 5 per cent decline in revenue and a decrease of 42-65 per cent in profit after tax compared to the results of the 2020-21 fiscal year.

Nam Kim Group Joint Stock Company (NKG) plans total revenue of VNĐ28 trillion this year, equivalent to the previous year and profit after tax of VNĐ1.6 trillion, down 28 per cent year-on-year.

SMC Trading Investment Joint Stock Company (SMC) sets a revenue target of VNĐ20 trillion this year, down 6.2 per cent; profit after tax of VNĐ300 billion, down 66.8 per cent compared to 2021.

Việt Nam Steel Corporation said world raw material prices will continue to rise when supply is tight, rising costs will continue to affect the purchase of raw materials and business performances would continue to be affected.

For the export market, due to the influence of the Russia-Ukraine conflict, the demand for steel in the European and American markets increased, but competitive pressure also increased as many countries, including China, are expected to increase capacity.

In the first quarter, the two leading steel enterprises still recorded good profit growth.

Specifically, Hòa Phát Group (HPG) achieved VNĐ44.4 trillion in revenue, up 41 per cent over the same period last year, and profit after tax reached VNĐ8.2 trillion, up 17 per cent.

HSG recorded revenue of VNĐ10.85 trillion, up 88 per cent; profit after tax reached VNĐ1.04 trillion, up 415 per cent over the same period. — VNS