Steel companies in Vietnam demonstrated significant performance variations in their third-quarter financial reports. Companies represented by Hoa Phat Group and Thong Nhat Flat Steel JSC achieved strong profit rebounds, while other steel manufacturers continued to face pressures.
Hoa Phat Group showed robust performance in the third quarter, with revenue exceeding 34 trillion VND (approximately $1.3 billion), a 19% year-on-year increase. All business segments achieved growth, with the steel sector growing 42% and the agricultural sector surging by 80%. After deducting costs and taxes, the group’s net profit exceeded 3 trillion VND, up 51% year-on-year. From its low point in late 2022 to its peak in Q3 this year, the company’s profits have consistently recovered, highlighting its recovery momentum.
In the first nine months of 2024, Vietnam’s largest steel producer recorded revenue exceeding 105 trillion VND, a 23% year-on-year increase, completing 75% of its annual target. Profits reached 9.21 trillion VND, a substantial 140% year-on-year increase, achieving 92% of the annual profit target.
Thong Nhat Flat Steel JSC also performed impressively in Q3, with net revenue growing 44% to 593 billion VND, and net profit nearly doubling compared to the same period last year, reaching 11 billion VND. The company’s revenue for the first nine months of 2024 climbed to 2.32 trillion VND, a 3.5-fold increase from 2023, with after-tax profit surging from 120 million VND in Q3 2023 to 26 billion VND. The company attributed its improved performance to customer expansion and efficient supply chain management, with production and sales volumes increasing by 54% and 48% year-on-year, respectively.
However, a significant number of steel companies reported losses in Q3 this year. Thai Nguyen Iron and Steel JSC recorded a net loss of nearly 79 billion VND, mainly due to falling sales prices and high raw material costs. Vietnam Steel Corporation – Thu Duc Steel JSC, despite an 18% year-on-year revenue increase, reported after-tax losses due to rising costs affecting gross margins. Vietnam Steel – Nha Be Steel, Vietnam Steel – VICASA, and SMC Trading Investment all reported losses in Q3.
MB Securities’ latest report indicates that steel companies faced numerous challenges in Q3, including price pressures due to weak Chinese demand and anti-dumping investigations in major export markets such as the EU and US. However, domestic market demand grew by 20%, with construction steel demand increasing by 25%, emerging as a bright spot.
Looking ahead, MB Securities expects industry gross margins to improve as raw material costs decline (coal and ore prices down 17% and 12% respectively) and construction steel prices fall by 9%. Experts anticipate that domestic steel prices may rise due to Chinese economic stimulus measures, with market share likely to increase in Q4.
For 2025, MB Securities forecasts construction steel and hot-rolled coil prices to rise by 7% and 6% respectively, reaching $611 and $590 per ton. Between 2025-2026, construction steel prices are expected to further increase by 7% and 8%, reaching $608 and $657 per ton respectively.
Early this week, steel stocks performed positively, with most industry stocks rising at least 1%. On Tuesday, some stocks maintained their upward trend, with Hoa Phat Group rising 1.12%, SMC Trading Investment up 3.4%, Nam Kim Group up 0.24%, and Viet Duc Steel Pipe up 0.29%.
Key News Points:
- Vietnamese steel companies show distinct Q3 performance differences.
- Hoa Phat Group and Thong Nhat Flat Steel report significant profit growth.
- Some companies continue to face losses due to cost pressures.
- Domestic demand growth emerges as industry highlight.
- Raw material price decreases expected to improve industry gross margins.
- Steel prices forecast to continue rising in 2025.
