Manufacturing firms deliver stronger earnings on efficiency gains

Manufacturing firms deliver stronger earnings on efficiency gains

Manufacturing companies posted robust first-half earnings as profit growth outpaced revenue, underscoring improving production activities, stronger cost discipline and rising confidence in a broader industrial recovery.

A notable feature of this year's second-quarter (Q2) earnings season is that many companies posted profit growth that outpaced revenue growth, highlighting improved operational efficiency, stronger cost control, and more effective business optimisation.

The garment and textile industry, one of the sectors that most clearly illustrates the recovery in manufacturing, has rebounded after facing significant pressure during the downturn in global consumer demand.

According to the Q2/2026 financial statements of TNG Investment and Trading JSC, the company generated revenue of more than $116.5 million, up 15 per cent on-year.

Net profit after tax rose 22 per cent to $5.88 million, marking the highest quarterly profit in the company's history.

For the first six months of the year, TNG's revenue increased 20 per cent, while net profit surged 26 per cent to $8.16 million.

The company attributed the strong performance to expanded production capacity, a greater focus on higher value-added orders, faster delivery of export shipments, and accelerated digitalisation and automation initiatives aimed at improving productivity and lowering manufacturing costs.

Vietnam National Textile and Garment Group (Vinatex) reported consolidated first-half revenue of $401.9 million and pre-tax profit of $35.3 million. Revenue increased 9.6 per cent on-year, while pre-tax profit climbed 32.4 per cent.

According to Vinatex, the results were driven by the group's proactive market response strategies, effective cost management, and improved labour productivity.

Meanwhile, Phu Bai Spinning JSC posted Q2 revenue of $13.7 million, up 23.2 per cent on-year, while net profit after tax increased fivefold to $4.40 million, supported by gradually recovering yarn demand, which significantly improved sales volume and production efficiency.

A similar trend was seen among building materials producers. During the quarter, Binh Minh Plastics JSC recorded revenue of $52.76 million, slightly higher than a year earlier, while net profit after tax reached $14.6 million, up about 11 per cent and marking the highest quarterly profit in the company's history.

For the first half of the year, Binh Minh generated revenue of $111.08 million and net profit after tax of $26.84 million, representing on-year increases of 3 per cent and 9 per cent, respectively.

Tien Phong Plastic JSC posted Q2 revenue of $86.6 million, up 8.8 per cent on-year, while net profit after tax surged nearly 49 per cent to $19.12 million.

For the first six months of 2026, the company recorded revenue of $145.8 million and net profit after tax approximated $29.3 million, up nearly 38 per cent from the same period last year.

Likewise, Thuan Duc JSC reported net revenue of $49.40 million, up 31 per cent on-year, supported by the timely delivery of previously secured orders and improving export and domestic markets.

However, the company’s net profit after tax grew even faster, soaring 104 per cent to $1.65 million. In the first half of the year, Thuan Duc posted net revenue of $99.6 million and net profit of $2.68 million, representing revenue growth of 37.6 per cent and a 2.2-fold increase in profit compared with the same period last year.

In the steel industry, Vietnam Steel Corporation estimated that consolidated revenue for the first six months of the year rose 30.4 per cent, while pre-tax profit increased 32.1 per cent on-year.

Based on last year's comparison base, the company is estimated to have generated approximately $1.15 billion in revenue and around $22 million in pre-tax profit during the first half of 2026.

According to Hoa Sen Group, net profit after tax for Q2 is estimated at $15.2 million, up nearly 40 per cent on-year. The improvement was attributed to the company's flexible inventory management strategy, cost optimisation, and effective utilisation of its nationwide distribution network amid a recovering market.

Vicem Ha Tien Cement JSC reported revenue for the same period of $90.44 million, up 17 per cent, while net profit increased 23 per cent to $5.52 million. This also represented the company's highest Q2 profit in five years, supported by a more than 6 per cent increase in cement sales volume.

The sharp rise in oil prices also enabled many companies across the oil and gas value chain to deliver strong business performance during the first half of the year.

Petrovietnam Technical Services Corporation is estimated to have generated consolidated revenue of $720.80 million and pre-tax profit of more than $40 million in the first six months of 2026, representing on-year increases of 29 per cent and 21 per cent, respectively.

Meanwhile, PV Drilling – formally Petrovietnam Drilling and Well Services Corporation – announced that both consolidated revenue and profit for the first half of the year are expected to exceed the company's targets by around 30 per cent.

The company also maintained a positive outlook for the drilling services market, citing rising exploration and production demand alongside continued constraints in global drilling rig supply.

The strong earnings performance reported by businesses is broadly consistent with the overall picture of the manufacturing sector.

According to S&P Global, the Manufacturing Purchasing Managers' Index rose to 51.8 in June, remaining above the 50-point threshold that signals expansion.

The report indicated that new orders continued to increase as customer demand improved. Manufacturing output expanded for a 14^th consecutive month, recording its fastest pace of growth since February. To meet rising production demand, manufacturers also increased purchases of raw materials for the second straight month.

During the first six months of the year, Vietnam's merchandise imports reached $283.17 billion, up 33.4 per cent on-year.

The increase in raw material imports reflects expectations of stronger order flows in the coming months, as well as growing demand for production expansion as market conditions continue to improve.

VIR