Vietnamese exporters exceed 2022 projections despite Q4 blip
Vietnamese exporters exceed 2022 projections despite Q4 blip
Despite facing increasing difficulties in the fourth quarter of 2022, many Vietnamese enterprises exceeded projections and are well poised to cope with challenges in 2023.
Looking back at results from the last year, a representative of Sao Ta Foods JSC said that sales for 2022 were expected to reach about $226 million, up 9.4 per cent on-year. Sao Ta's consolidated pre-tax profit is estimated to reach $14.7 million, up 18 per cent, and exceeding initial projections by 6 per cent.
This marks a high profit mark for Sao Ta in their 26 years of operations. However, looking at the fourth quarter of last year by itself, the company's profit is estimated to decrease by 14.3 per cent over the same period last year, signalling a slowdown towards the end of 2022.
Ho Quoc Luc, chairman of Sao Ta's board said, “The slowdown in the fourth quarter was because the consumer market has been quiet, and off-season shrimp farming has been impacted by diseases causing a significant decrease in commercial shrimp production.”
Many other export enterprises have also been impacted by the difficulties in foreign trade. Last month, Le Duc Nghia, chairman at An Cuong Wood Working JSC, said that the company's 2022 profit was expected to reach $26 million. Although their fourth quarter also disappointed, the strong performance of the first three quarters pushed the whole year's profit to grow by 35-40 per cent on-year, beating projections by 9 per cent.
A representative of Danang Rubber JSC said that the company’s profit last year is estimated to be $16.5 million, up 4.4 per cent from 2021. Sales volumes exceeded 20 per cent of design capacity, even though Danang Rubber had increased prices of their tyre product lines three times over the year.
Similarly, bedding product exporter, Everpia, also saw a slowdown in the fourth quarter. However, it is estimated to reach more than $43.4 million in revenue and $3.47 million in profit after tax for the whole of 2022, smashing profit projections by 14 per cent.
HSBC has advised that exporters remain cautious for the immediate future. According to the banking giant, challenges in foreign trade are among of the largest risk factors when projecting growth. The export value of the whole economy increased by 5.2 per cent on-year in October, but quickly reversed that growth to a drop of 8.9 per cent and 14 per cent in November and December respectively, when compared to the previous year.
The Purchasing Managers' Index continued its downward trend for the second consecutive month in December, down to 46.4 points, marking the lowest level in 18 months.
Lee Jae Eun, general director of Everpia, expects that in the coming time, export sales of cotton sheets will be affected, but sales of bedding products will remain stable. He expressed his optimism for the development of a new factory in Dong Nai in March this year.
Regarding shrimp export markets, Luc from Sao Ta suggested that major markets are still "very quiet" as consumption in the US decreased in part due to the impact of the snowstorm at the end of 2022. After two years of pursuing a growth strategy in Japan, he said one of the biggest successes for Sao Ta is that Japanese consumers have finally recognised the quality of their products.
"The current period is for preparing an acceleration plan for when the opportunities come. In 2023, the company will increase the number of shrimp ponds to take the initiative in raw materials, start a new factory from the beginning of the year, train staff, and rearrange the warehouses to minimise costs," said Luc.
For Danang Rubber company, 2022 saw their tyre products penetrate the US market, with export revenue growth for this market expected to reach 20 per cent on-year, although the overall purchasing power of the world's largest economy was affected by a rise in interest rates and the Fed's tightening monetary policy.
