Top 50 most effective businesses’ profits up despite economic downturn
Top 50 most effective businesses’ profits up despite economic downturn
Post-tax profits of the top 50 effective businesses in Vietnam increased sharply by 16 percent, while the turnover increased by 5 percent. In the eyes of many experts, this impressive performance is evidence of the government’s initial success in stabilizing the macro economy. With the inflation rate reigned in to a single-digit level, the way was paved for interest rate reductions, providing a much needed boost to businesses here.
The report, made public by Nhip Cau Dau Tu journal, highlighted the fact that the sharp plunge in the cost of capital was an important factor behind the profit increases.
By August 2013, the annual interest rate for nearly 75 percent of old loans had dropped to 13 percent from its peak of 20 percent in 2012. Businesses’ average ratio of debt on equity hovered around 70-75 percent in the last three years.
The top 50 effective businesses reportedly achieved average revenue and post-tax profit growth rates of 10 percent and 18 percent, respectively, in 2013, far exceeding the averages of 5 percent and 16 percent in the market.
Three factors have been cited to explain the gains. First, the capital mobilization cost has decreased (the ratio of debt on equity of top 50 businesses was 57 percent).
Second, pharmacy companies made a great contribution to the high growth of the top 50 effective businesses.
And third, large corporations, the major players in their business fields, all have reported profit surges.
Vingroup, a real estate group, for example, makes up 13 percent of the post-tax profit of the top 50 businesses’ profit.
In 2013, Vingroup sold the Vincom A Center project for VND9.8 trillion and earned VND4.3 trillion in profit. That huge profit helped it jump from the 22nd position in 2013’s ranking to the fourth position in this year’s ranking.
Consumer goods manufacturers’ growth slows down
Makers of consumer goods reportedly achieved only a 7 percent growth rate in 2013, after gaining 12 percent the year before.
Both Vinamilk, the nation’s leading dairy producer, and Vinacafe Bien Hoa, a coffee producer which has been confronted with fierce competition from new comers in the market, have reported slowdowns in both revenue and profit.
Natural rubber manufacturers meeting difficulties
Rubber manufacturers are experiencing tough times as rubber exports have dropped dramatically in both quantity and revenue due to cooling in the world market.
This explains why Dong Nai and Phuoc Hoa Rubber Companies are the only two firms which remain in the top 50 list. Meanwhile, the Tay Ninh Rubber Company has been weeded out of the list due to its negative revenue.
Pharmacy companies live well
As the demand is still higher than the supply, pharmacy companies don’t have much to worry about despite the economic recession.
The value of the Vietnamese drug market in 2013 was estimated at $3.3 billion, an increase of 16 percent over 2012. It is believed that the market will have a value of $7.06 billion by 2018, with an annual growth rate of 17 percent, the highest level in South East Asia.
Hence it comes as no surprise that Hau Giang Pharmacy and Traphaco have gotten higher grades and risen into the top 10 of the 2014 rankings.
vietnamnet
