Vietnamese companies lower 2021 targets despite brighter economic outlook

Even though economic growth is expected to strongly recover this year as the pandemic has been contained, companies in many sectors have still lowered their profit targets.

Pha Lai Thermal Power Plant in Pha Lai, Chi Linh District, Hai Duong Province. — Photo npcetc.vn

According to VNDirect Securities Corporation, total profits of companies listed on three exchanges, including the Ho Chi Minh Stock Exchange, Ha Noi Stock Exchange and UPCOM, rose 15.6 per cent year-on-year in the fourth quarter of 2020.

With outstanding economic recovery, listed companies’ profits are estimated to grow 23 per cent this year, said VNDirect.

However, despite a bullish outlook, many companies submitted lower business plans compared to last year to shareholders.

Pha Lai Thermal Power JSC (PPC) set a target of nearly VND5.7 trillion in total revenue, down 31 per cent over last year, resulting in a drop of 66 per cent in profit before tax to VND415 billion.

Although the power sector is expected to grow as it has recovered strongly, PPC's profit target is the lowest since 2014.

During 2017 - 2020, PPC had always set a profit plan of over VND700 billion per year and then surpassed the plan. Last year, the company exceeded its profit target by 30 per cent.

The company is likely to face many difficulties and challenges this year.

“Power output and contracted power output are very low this year, which will affect our operation process, as well as business results,” said PPC.

The volatility of coal prices also directly weighs on the company’s production costs, affecting its competitiveness in the electricity market.

Petrovietnam Fertilizer & Chemicals Corporation (DPM) and Petro Viet Nam Ca Mau Fertilizer JSC (DCM) also lowered their business results on higher raw material costs. Accordingly, DCM set this year’s profit after tax at VND197 billion, down 70 per cent year-on-year, while DPM estimated its profit after tax to decline 48 per cent to VND364 billion.

DCM said that it has to face a series of difficulties, especially as gas prices tended to rebound, the COVID-19 outbreak and new strains spreading to many countries, and the drought and saline intrusion in the dry season in the southwest continues unpredictably, affecting demand for fertiliser products.

 

Severe competition between local and foreign fertiliz=ser producers also puts pressure on the market.

Enterprises in the natural rubber industry also hesitated in making business plans such as Phuoc Hoa Rubber JSC (PHR), Vietnam Rubber Group JSC (GVR) and Tay Ninh Rubber JSC (TNR).

PHR expected 2021 will be a tough year for the industry, especially in collecting latex.

After struggling last year, the business prospects of enterprises in the fisheries sector are poor.

Travel Investment And Seafood Development Corporation (DAT) estimated this year’s revenue at VND2.1 trillion, down 2.8 per cent against last year, with profit after tax decreasing 22.9 per cent to VND40 billion.

According to DAT, demands in export markets due to COVID-19, higher freight costs and higher raw materials costs are reasons for its pessimism.

Similarly, after a plunge in 2020, Vinh Hoan JSC (VHC) continues to set a lower profit target. The enterprise expected a drop of 22.2 per cent in revenue to VND8.5 trillion, with profit after tax of VND700 billion, down by 2.6 per cent.

Some companies even set negative profit targets.

36 Corporation (G36) surprised shareholders and investors with a revenue plan of over VND19 trillion, down 17.03 per cent year-on-year, and a loss of VND66 billion.

In 2020, despite being heavily affected by the COVID-19 pandemic, G36 still recorded impressive business results as its revenue reached over VND2.3 trillion (up 28.7 per cent), resulting in a growth of 83.4 per cent in profit after tax profit to VND58 billion. Since registering to trade on UPCOM in 2016, G36 has always been profitable.— VNS

Steadying the economic ship

Steadying the economic ship

Despite numerous challenges making dents in all trade and investment activities, Vietnam’s economic growth quality has seen significant improvements over the past five years in general,

 
 

Other News

.
FDI supports Vietnam climb the global value chain
FDI supports Vietnam climb the global value chain
BUSINESSicon  09/06/2021 

Vietnam has successfully transformed into a manufacturing-oriented economy,
supported by stronger global value chain (GVC) participation thanks to a rise in foreign direct investment (FDI), especially in the manufacturing industry.

Expanding action to weed out pandemic
Expanding action to weed out pandemic
BUSINESSicon  08/06/2021 

The prime minister has ordered a series of sturdy actions to fight against COVID-19 and spur on local production, as people look to the government for protection with the spectre of the pandemic looming yet again.

Vietnam a bright spot for foreign investors: experts
Vietnam a bright spot for foreign investors: experts
BUSINESSicon  08/06/2021 

Vietnam has been chosen among leading destinations in Southeast Asia by Japanese investors, Nakajima Takeo, Chief Representative of the Japan External Trade Organisation (JETRO) in Hanoi, has said.

FDI inflows remains spotlight of Vietnam's economy
FDI inflows remains spotlight of Vietnam's economy
BUSINESSicon  09/06/2021 

The government has set up an FDI task force to support multinationals and foreign businesses grasping investment opportunities in Vietnam.

Businesses need more effective support amid COVID-19
Businesses need more effective support amid COVID-19
BUSINESSicon  08/06/2021 

Like many countries, Vietnam may have to depend on vaccines to achieve herd immunity and be virus-free, but enterprises may not be able to wait. They are in dire need of help and are craving new momentum to return to a “real normal” situation.

Vietnam expects to see export growth in rising global demand
Vietnam expects to see export growth in rising global demand
BUSINESSicon  08/06/2021 

Global demand for goods is recovering and this is an opportunity for Vietnam to boost its exports of consumer and industrial products, according to the Ministry of Industry and Trade (MoIT).

Stock market an attractive investment channel for local players
Stock market an attractive investment channel for local players
BUSINESSicon  08/06/2021 

The stock market is still an attractive investment channel for investors in the near future. However, it also poses many challenges for regulators and market members, said experts.

Vietnam calls for initiatives to ensure efficient functioning of APEC supply chains
Vietnam calls for initiatives to ensure efficient functioning of APEC supply chains
VIETNAM & WORLDicon  07/06/2021 

Asia-Pacific Economic Cooperation (APEC) economies needs to continue promoting free and open trade and investment, undertake initiatives to ensure regional supply chains to function smoothly and efficiently,

Small tourism businesses struggle to adapt to COVID-19
Small tourism businesses struggle to adapt to COVID-19
BUSINESSicon  07/06/2021 

The fourth wave of COVID-19 infections in Vietnam has caused disruptions to most sectors once again as the country was preparing for the tourism season.

Drawing up plans to buttress recovery
Drawing up plans to buttress recovery
BUSINESSicon  07/06/2021 

The ongoing fight against the COVID-19 pandemic has led to huge demands for capital for Vietnam to support local production. 

Solar PV market under duress from dependence on imports
Solar PV market under duress from dependence on imports
BUSINESSicon  07/06/2021 

As one of the fastest-developing countries in solar thanks to the current feed-in tariff, Vietnam’s billion-dollar solar panel market is mostly dominated by foreign investors and depending on imports.

VN game industry can become big exporter: experts
VN game industry can become big exporter: experts
BUSINESSicon  07/06/2021 

Vietnam’s mobile game market has huge potential and games can become one of the country’s major exports, experts have said.

VIETNAM BUSINESS NEWS JUNE 8
VIETNAM BUSINESS NEWS JUNE 8
BUSINESSicon  08/06/2021 

Vingroup to produce Covid-19 vaccine

Trade with China: $20 billion in exports, $43 billion in imports
Trade with China: $20 billion in exports, $43 billion in imports
BUSINESSicon  08/06/2021 

Vietnam’s import and export activities in May were affected by the fourth Covid-19 wave, but they still increased generally.

Record hot weather in North, power shortages could occur
Record hot weather in North, power shortages could occur
BUSINESSicon  08/06/2021 

In the most recent heat wave in northern Vietnam, electricity consumption has set "historic peaks".

Ministry denies proposing price stabilisation fund for steel
Ministry denies proposing price stabilisation fund for steel
BUSINESSicon  07/06/2021 

The Ministry of Industry and Trade (MoIT) has denied rumours that it proposed the establishment of a State stabilisation fund to cope with the sudden increase in steel prices that has impacted many businesses.

Amid crisis, airlines seek ways to prosper
Amid crisis, airlines seek ways to prosper
BUSINESSicon  07/06/2021 

Suffering heavy losses due to the drop in passenger numbers under the impact of the Covid-19 pandemic, some airlines have boosted cargo transport services and made a profit. 

VN auto manufacturers hit hard for last two years
VN auto manufacturers hit hard for last two years
FEATUREicon  07/06/2021 

The Vietnamese auto market prospered for a few years before being affected by the Covid-19 pandemic, but sales of locally assembled cars have fallen.

E-commerce sales boom during pandemic
E-commerce sales boom during pandemic
BUSINESSicon  07/06/2021 

E-commerce platforms in Vietnam have seen the number of new users grow by 41% since the outbreak of the Covid-19 pandemic. Most of the new users said they would continue to use the new form of shopping even after the epidemic ends.

Supermarkets report dramatic increase in online orders these days
Supermarkets report dramatic increase in online orders these days
BUSINESSicon  06/06/2021 

Some supermarkets and fast food stores in districts 12, Tan Binh, Hoc Mon yesterday announced a dramatic increase in online orders, up by 3-5 times compared to prior days.

 
 
 
Leave your comment on an article

OR QUICK LOGIN