More than half a year has passed, but luck has not yet knocked on the doors of cement businesses, as business results show that most businesses are making losses.
The gray color continues to haunt the cement industry, when looking at the business results of the first half of 2024, with the vast majority of businesses reporting losses, only a few reporting profits, but profits are also very small.
Declining consumption has had a strong impact on the revenue and profit of the cement sector. Vicem But Son Cement Joint Stock Company extended its losing streak to the 7th consecutive quarter, recording a net loss of more than VND36 billion in the second quarter of 2024.
In the past 6 months, But Son's revenue reached 1,200 billion VND, down 10% compared to the same period, accumulated profit for 6 months was a net loss of 92 billion VND, while in the same period last year it was a loss of 32 billion VND.
Also in the Vicem system, Vicem Hai Van Cement Joint Stock Company recorded revenue in the second quarter of 2024 of just over VND97 billion, down 43% compared to the same period last year. This result caused the Company to continue to have a net loss of nearly VND9.5 billion and extended the loss streak for the 5th consecutive quarter.
In the first half of 2024, Vicem Hai Van lost nearly 30 billion VND, thereby increasing the accumulated loss at the enterprise as of June 30 to more than 82 billion VND.
The parent company, Vietnam Cement Corporation (Vicem), also continued to report a loss of VND863 billion in the first half of 2024. Vicem's loss was actually mainly due to losses in subsidiaries such as Vicem But Son, Bim Son Cement, Ha Long...
According to Vicem's leadership, in the first 6 months of 2024, the domestic cement market will still face many difficulties due to low demand, few new civil construction projects starting, and no signs of recovery in real estate. Fierce competition on selling prices among cement manufacturers due to pressure on product inventory and excess production capacity reduces production and business efficiency.
The bright spot in business belongs to the “big guys” with a foundation like Vicem Ha Tien Cement Joint Stock Company. In the first 6 months, Vicem Ha Tien recorded a revenue of more than 3,400 billion VND, but the profit was very thin, only reaching more than 21 billion VND.
Chinfon Cement Joint Venture reported a profit of VND582 million in the first half of the year. Compared to the same period last year when the profit was less than VND270 million, the profit in the first half of this year has improved, but is still at a very low number.
Realizing that the market is still facing difficulties, supply is greater than demand, and output is shrinking both domestically and for export, from the beginning of the year, cement enterprises have set modest business targets.
For example, Vicem Ha Tien plans to produce and do business with total revenue of 7,032 billion VND, after-tax profit of more than 23 billion VND.
Meanwhile, parent company Vicem aims to produce 17.03 million tons of clinker, up 3% compared to 2023; total consumption output of 24.31 million tons, up 7.7% compared to 2023; total revenue of VND 29,814 billion, down 2% compared to 2023.
Regarding the profit in 2024, Vicem leaders said that due to the difficulty in predicting fluctuations in prices of raw materials, fuels, and input materials (in which electricity prices may continue to increase) and cement demand has not yet recovered, businesses in the Vicem system are carefully analyzing and evaluating information and actual operating conditions, reviewing and minimizing costs to build a suitable profit plan.
However, with heavy losses in the first half of this year, it will be difficult for this cement manufacturer to reverse the situation, especially when the market situation in the coming months is not really improving.
At a conference with the Prime Minister in mid-June, Deputy Minister of Construction Nguyen Van Sinh said that from 2023 to now, clinker and cement production has seriously declined. The entire industry's production lines only reached 75% of their design capacity, and in 2023 alone, 42 production lines had to stop production for 1 to 6 months, some of which had to stop for the whole year.
At present, many factories are still stopping production or producing at a low level due to lack of output. The cement industry is waiting for the market to recover in the remaining months of the year to boost consumption, helping to improve revenue and business efficiency.
According to the assessment of most cement enterprises, the possibility of completing this year's plan is very difficult. The construction market from now until the end of 2024 is forecast to remain in a state of low demand. It is expected that domestic consumption this year will hardly reach 60 million tons (last year it reached 56.6 million tons, equal to 83.5% of 2022). In the first half of 2024, domestic and export consumption of cement and clinker is 44 million tons, equivalent to the same period. The Vietnam Cement Association calculates that this year's consumption is only equivalent to last year's 88 million tons.
Source: https://baodautu.vn/cong-ty-xi-mang-lai-mong-lo-day-d222129.html
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