Steel companies post disappointing results in Q1 despite strong market growth

According to the Viet Nam Steel Association (VSA), domestic steelmakers produced 5.07 million tonnes in the first four months, registering growth of 37 per cent year-on-year. Steel consumption also rose 29 per cent to reach nearly five million tonnes.

Ending March, seven of the 11 listed steel firms posted higher revenues compared to the same period last year.

SMC posted the highest revenue growth of 27 per cent, reaching more than VND4 trillion (US$178.3 million) in the first three months, driven by a 25 per cent rise in sales volume.

Hoa Phat Group (HPG) and Hoa Sen Group (HSG) – the two biggest steel producers by market value – grew 15 per cent and 12 per cent, respectively. HPG’s Q1 revenue reached nearly VND15 trillion ($643.8 million), while HSG reached VND7.7 trillion ($330.5 million).

On the other end of spectrum, Dana – Y Steel (DNY), Vietnam – Italy Steel (VIS) and Nam Kim Steel (NKG) slumped, of which Dana – Y Steel fell 99 per cent compared to the same period last year. Revenues at the other two companies decreased 21 per cent and 18 per cent, respectively.

Production at Dana – Y Steel was halted for six months in November last year by Da Nang due to pollution issues. Its revenue in this period came from selling off its inventory.

Meanwhile, slumps in operations of Vietnam – Italy Steel and Nam Kim Steel were due to lower export volumes.

The three companies incurred losses during the period, of which Nam Kim posted a loss of VND102 billion compared to a profit of VND131 billion in the same period last year.

DNY reported a loss of nearly VND57 billion and VIS lost VND34 billion.

Other loss-making companies included Pomina Steel (POM) and Dai Thien Loc (DTL).