Textile shareholders break out the champagne

Textile shareholders break out the champagne

Textile and garment sector shareholders are happy with a solid dividend payment amid continuing economic hardships.

When shareholders of many building material production companies were disappointed with firms’ low business efficiency and their inability to meet dividend payments, those at many textile garment firms were happy with these firms’ upbeat business results and high dividend payments.

Ho Chi Minh City-based Viet Tien Garment Joint Stock Corporation offered shareholders 25 per cent dividend rate in 2012 when the company reported VND3.851 trillion ($476 million) revenue, surging 15 per cent on-year and pre-tax profits VND170 billion ($8.1 million), up 13 per cent.

In the north, Hanoi-based Garment 10 Joint Stock Corporation gave shareholders relatively high dividend at 18 per cent.

Last year, Garment 10 reaped VND1.503 trillion ($71.5 million) revenue, up 24 per cent on-year and pre-tax profits over VND37 billion ($1.7 million). Labourers’ incomes averaged VND5 million ($238) per month.

With around VND2 trillion ($96 million) in revenue, up 19 per cent and pre-tax profits of VND55.4 billion ($2.6 million), up 5 per cent on-year, Hoa Tho Textile Garment Joint Stock Corporation, based in central Danang, paid 20 per cent dividend in cash to shareholders.

According to a Hanoi-based Textile Finance JSC (TFC) source, 2012 was a challenging year for credit organisations and the banking system. Despite TFC only achieving 86.7 per cent of the year’s plan the company still offered shareholders a 9 per cent dividend which was still higher than current ceiling deposit rate 7.5 per cent, per year.

In 2013, though the sector’s major export markets like the US and Japan still mired in difficulties, shareholders are still optimistic as many textile clothing firms could take the initiative of their business plans and envision dividend payment to shareholders from 15-20 per cent of their chartered capital.

For instance, Viet Tien Garment set a minimal dividend rate of 20 per cent.

“With a stable output market and customer base and big production capacity from 22 subsidiaries and affiliates, the target is within our reach,” said the company’s general director Bui Van Tien.

Tien said Viet Tien Garment would apply consistent measures to save costs, boost labour productivity and improve environmental standards.

Besides, the company is contemplating shifting production from the city to other locations with favourable development conditions. One pivotal project is that involving building Tan Thanh Tien garment complex in southern Ben Tre province with more than 20,000 labourers.

The project aims to take advantages of EU’s free trade agreement (FTA) or in the near future the Trans-Pacific Economic Partnership Agreement (TPP).

As for Garco 10, this year the company set a 12 per cent hike in revenue target to reach VND1.688 trillion ($80.3 million), VND39 billion ($1.8 million) pre-tax profits and 17 per cent dividend though additional costs were forecast at VN56.5 billion ($2.7 million) due to rising input costs, according to the company’s general director Nguyen Thi Thanh Huyen.

Hoa Tho Textile Garment reportedly set a VND2.3 trillion ($109 million) revenue target, a VND55 billion ($2.6 million) pre-tax profit and 20 per cent dividend in cash and bonus shares.

TFC’s 2013 general shareholder meeting had approved business targets with VND190 billion ($9 million) revenue, VND90 billion ($4.3 million) pre-tax profits, 18 per cent return-on-equity (ROE) rate and 11.5-12 per cent dividend rate.

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