Steel producers post notable divergence in Q3 performances
Steel producers post notable divergence in Q3 performances
The third quarter financial reports from various steel companies showed a clear divergence. While some producers like Hòa Phát Group and Thống Nhất Flat Steel JSC witnessed profit resurgence, others faced ongoing losses.
Hòa Phát Group's products stored in a warehouse. — Photo courtesy of the company |
Hòa Phát Group showed a robust performance, with third quarter (Q3) revenue surpassing VNĐ34 trillion (over US$1.3 billion), a 19 per cent surge from the previous year. Noteworthy was the across-the-board growth in all segments, particularly a 42 per cent rise in steel and an 80 per cent surge in agriculture.
Net profits for the group hit more than VNĐ3 trillion after costs and taxes, marking a substantial 51 per cent increase year-on-year. The upward trajectory in profits from a low point in late 2022 to the high in Q3 this year underlines the company's sustained recovery.
For the first nine months of 2024, the national leading steel producer reported revenue exceeding VNĐ105 trillion, a 23 per cent rise year-on-year, achieving 75 per cent of the annual target.
Its profits soared to VNĐ9.21 trillion, a remarkable 140 per cent increase over last year, reaching 92 per cent of its yearly profit goal.
Similarly, Thống Nhất Flat Steel JSC posted remarkable growth in Q3. The company's net revenue grew by 44 per cent to VNĐ593 billion, with net profits nearly tripling last year's figure to reach nearly VNĐ11 billion.
Thống Nhất Flat Steel's revenue for the first nine months of 2024 surged to nearly VNĐ2.32 trillion, a 3.5-fold increase from 2023, with profits after tax nearing VNĐ26 billion, a significant gain from just over VNĐ120 million in Q3 of 2023.
It attributed its positive results to efforts in customer acquisition and sourcing reasonably priced supplies. As a result, production volume increased by 54 per cent and consumption rose by 48 per cent year-over-year. The rise in revenue was the main factor contributing to the company’s profit increase.
Nonetheless, a substantial number of steel entities faced losses in Q3 this year.
For instance, Thái Nguyên Iron and Steel JSC recorded a net loss nearing VNĐ79 billion, attributing market challenges like plummeting selling prices and sustained high raw material costs.
VNSTEEL - Thủ Đức Steel JSC reported increased revenue of 18 per cent year-on-year but suffered from escalating costs, leading to a decline in gross profits and a subsequent post-tax loss.
VNSTEEL - Nhà Bè Steel JSC, VNSTEEL - VICASA Steel JSC and SMC Trading Investment JSC also faced losses in Q3, reflecting the volatile market conditions impacting the steel industry.
Positive outlook
In a recent update, MB Securities (MBS) highlighted the challenges faced by companies in Q3, citing significant price pressure from weak demand in China and ongoing anti-dumping probes in key export markets like the EU and the US.
Despite these hurdles, a silver lining emerged in the form of domestic demand, which saw a commendable 20 per cent surge, buoyed by a substantial 25 per cent uptick in construction steel requisites.
MBS foresees an upturn in industry gross margins on account of lowered material input costs—coal and ore prices have dipped by 17 per cent and 12 per cent, respectively, alongside a 9 per cent decrease in construction steel prices.
Experts predict a potential rise in domestic steel prices with China's economic stimulus, and anticipate market share growth in Q4.
Looking ahead to 2025, MBS projects a 7 per cent and 6 per cent increase in construction steel and hot-rolled coil (HRC) prices, pegging them at $611 and $590 per tonne. The outlook for 2025–2026 suggests a further 7 per cent and 8 per cent price hike for construction steel, reaching $608 and $657 per tonne.
On the market, steel stocks opened the week on a postive note with most of the ticker symbols in the industry gaining at least 1 per cent.
On Tuesday, some still maintained the bullish trend. Hòa Phát Group soared 1.12 per cent, SMC Trading Investment rose 3.4 per cent, Nam Kim Group rose 0.24 per cent and Vietnam Germany Steel Pipe increased 0.29 per cent.
