The latest Government directive to remove difficulties in production and consumption of construction materials by accelerating public investment, social housing, real estate projects, etc. is expected by the cement industry to create momentum for consumption and improve revenue in the last months of the year.
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| The cement industry is hoping that the Government's measures to ease difficulties will help boost consumption. Photo: Duc Thanh |
Low business efficiency
Market signals in the second quarter of 2024 were better than in the first quarter, helping domestic cement enterprises improve sales activities, combined with cutting financial costs, thanks to which some enterprises reduced losses, some enterprises even reported profits, but overall business efficiency remained low.
Bim Son Cement Joint Stock Company has just announced its semi-annual financial report for 2024, with net sales revenue reaching VND 1,710 billion, down 1.7% over the same period last year. After deducting expenses, in the second quarter, Vicem Bim made a profit of VND 27 billion after many months of losses. Accumulated in the first 6 months of 2024, the company still lost VND 22.6 billion, however, compared to the loss of VND 55.3 billion in the same period last year, this accumulated loss has decreased by more than VND 32 billion.
According to Vicem Bim Son's leaders, cement supply still far exceeds demand, product inventory pressure, and excess capacity lead to fierce competition among businesses, reducing selling prices, developing new products to increase consumption output and expand market share.
Along with that, the selling price of cement tends to decrease, while the price of raw materials and fuel remains high, reducing business efficiency. The trend of switching from bagged cement to bulk cement also reduces business efficiency due to the brand value associated with bagged cement.
The most significant improvement in business performance in the second quarter was Vicem Ha Tien Cement Joint Stock Company (HT1). This enterprise recorded net revenue in the second quarter of nearly VND 1,909 billion, net profit of nearly VND 46 billion. Accumulated in the first 6 months of 2024, Vicem Ha Tien's revenue reached more than VND 3,400 billion, down 8%, net profit reached more than VND 21 billion.
Looking at the business results of the first quarter of 2024, when revenue reached only over VND 1,585 billion, after-tax loss was over VND 24 billion, Vicem Ha Tien had a spectacular "transformation" from loss to profit. However, the reason why Vicem Ha Tien made a profit was not due to the recovery in revenue, but because interest expenses were sharply reduced. This enterprise has cut interest expenses from VND 70 billion in the same period, down to only VND 30 billion.
These are just a few businesses with improved business results, while most businesses in the industry are still facing difficulties. For example, Vicem But Son (HNX: BTS) lost more than VND 36 billion in the second quarter of 2024. With no profit in both quarters, Vicem But Son had a net loss of VND 92 billion in the first 6 months.
Vicem Hai Van (HOSE: HVX) recorded revenue in the second quarter of 2024 of more than VND97 billion, down 43% year-on-year, the fifth consecutive quarter of loss for the company. According to the company's leaders, the main reason for the profit decline was that cement consumption in the second quarter decreased by nearly 48,000 tons, of which clinker decreased by 27,800 tons, equivalent to a decrease of 31% year-on-year.
Accumulated in the first 6 months of 2024, Vicem Hai Van's revenue decreased by 49% compared to the same period, to 152 billion VND. After-tax profit lost nearly 30 billion VND.
Weak demand, along with domestic and foreign competition, has left the financial picture of cement companies gloomy. According to statistics from 18 cement companies listed on the stock exchange, in the first half of the year, these companies suffered pre-tax losses of nearly VND110 billion, 3.4 times higher than the same period last year.
Expecting Government measures to overcome difficulties
Cement industry enterprises are expecting production and business to be vibrant in the remaining months of the year, thanks to increased public investment and the recovery of the civil construction segment.
Statistics in the first half of 2024 show that the total consumption of clinker and cement will reach about 44 million tons, equivalent to the same period last year. With the Government's direction on removing difficulties for construction materials, it is expected that cement consumption from now until the end of the year will have a new boost, helping manufacturers to ease difficulties. 
Recently, Deputy Prime Minister Tran Hong Ha signed and issued Directive 28/CT-TTg on a number of solutions to remove difficulties and obstacles, promote production and consumption of cement, steel and construction materials.
Accordingly, the Directive requires all levels and sectors to closely follow reality and perfect institutions and policies to support enterprises in production and business in this field.
Promote public investment, construction of transport infrastructure, irrigation, investment in developing urban and rural infrastructure, national defense and security projects, marine and island projects; implement the project to invest in building at least 1 million social housing apartments, study to increase the rate of choosing the option of using reinforced concrete overpasses for expressway projects, prioritize investment in cement concrete roads in developing rural roads in mountainous areas, areas with difficult terrain, etc.
Associate Professor, Dr. Luong Duc Long, Vice President and General Secretary of the Vietnam Cement Association (VNCA) said: "The key is to strengthen infrastructure construction and basic construction to increase cement consumption output, so that new production enterprises have output."
One of the Government's directives that cement industry enterprises are waiting for is to assign the Ministry of Finance to study and adjust tax policies on exporting clinker and cement products to ensure competitiveness with other countries exporting these products and remove difficulties for exports.
"If the clinker export tax is reduced to 0% instead of the current 10%, it will help businesses increase their competitiveness in exports," said a representative of VNCA.
In fact, from the beginning of 2023, when the clinker export tax increased to 10% and the 10% value added tax was not deducted, Vietnam's clinker price lost its advantage of up to 20% compared to the clinker price of competitors in the market, resulting in businesses being unable to export.
Source: https://baodautu.vn/cho-doi-tieu-thu-xi-mang-khoi-sac-d223893.html
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