VN firms resolute in business goals despite COVID-19 impacts

Many companies have performed well in the first two months of the year despite the COVID-19 outbreak and insist on keeping business targets unchanged.

firms resolute in business goals despite covid 19 impacts

Despite the current unfavourable business situation, many firms are optimistic about outperforming their annual targets

TNG Investment and Trading JSC based in the northeastern province of Thai Nguyen notified that despite the implications of the novel coronavirus, the company still reaped nearly VND560 billion ($24.35 million) in revenue in the first two months of this year, up 4 per cent on-year.

According to TNG chairman Nguyen Van Thoi, until present, the company has secured a stable order intake for 2020. For instance, its long-time customers like Decathlon from France rose import volume by 29 per cent against 2019, while Sportmaster from Russia also tripled its order value from TNG to $15-20 million, equal to the output capacity of an entire factory.

So far this year, TNG counted around VND4.9 trillion ($213 million) in total revenue, up 10 per cent on-year.

PetroVietnam Ca Mau Fertilizer JSC (ticker code DCM) has just announced reaching 20 per cent of its full-year urea fertiliser production plan, far exceeding its profit target for the first two months.

Particularly, DCM produced 157,000 tonnes of urea fertiliser in the first two months of this year and earned VND34.7 billion ($1.5 million) in profit, equal to 69 per cent of the annual profit plan.

The current drop in oil price is a positive factor helping to drive down material input costs.

DCM has recently set out its full-year business plan with the revenue target of VND7.956 trillion ($345.9 million), up VND1 trillion ($43.5 million) compared to 2019. However, the company has set its after-tax profit target at VND50.4 billion ($2.2 million), down 88 per cent against last year based on the scenario of oil hitting $60 per barrel. The global oil price was in fact $26.95 per barrel at the end of the trading session on March 17, the lowest since February 2016, according to Dow Jones Market Index.

At the same time, Vinacomin Minerals Holding Corporation (KSV), envisages achieving VND6.588 trillion ($286.4 million) in revenue, up 6 per cent on-year, according to the company’s prospectus.

Its pre-tax profit, however, is set to escalate by nearly 11-fold on-year to VND163 billion ($7.1 million).

 

“Despite the difficulties this year associated with site clearance work for our projects and particularly the COVID-19 outbreak, many positive factors are on the horizon. For instance, the mineral price is on an upward trend, our production plants are in stable production, and borrowing costs are being softened which will shore up are sharply raised profit target,” said a company executive.

With a more prudent approach, Ho Chi Minh City Infrastructure Investment JSC (CII) has worked out two growth scenarios for 2020.

CII expects a more upbeat business picture this year as the city’s management has committed to pushing up with key projects. The impediments, however, are related to dealing with legal procedures of real estate projects and removing bottlenecks ahead of transport infrastructure.

Accordingly, in its most optimistic forecast, CII has set revenue and after-tax profit targets at VND6.6 trillion ($287 million) and VND1.608 trillion ($69.9 million), up 61 and 68 per cent on-year, respectively.

In the second, less positive scenario, the company estimates after-tax profit going down slightly (by 16 per cent) to VND808 billion ($35.13 million), but revenue would still jump by 42 per cent to VND5.8 trillion ($252.17 million). The dividend rate is proposed at 16 per cent.

COVID-19 is having remarkable impacts on economic development, as well as firms’ performance, however, their growth performance and plans ahead show that many firms have made careful preparations to weather the stormy period. VIR

Quynh Thuy

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