Hoa Phat returns to trillion-dong profit level

The leading enterprise in the construction steel market recorded a net profit of more than 1,400 billion in the second quarter, down more than 60% compared to the same period but nearly 4 times higher than the first quarter of this year.

Hoa Phat Group (HPG), the leading enterprise in the construction steel market, still recorded a sharp decrease in business results compared to the same period, mainly due to difficulties in the real estate market and slow disbursement of public investment capital, causing demand to shrink. However, the "steel king"'s profits have begun to increase again after the most difficult period in the last quarter of last year.

According to the consolidated financial report for the second quarter, Hoa Phat's revenue reached nearly VND30,000 billion, down more than 20% compared to the same period last year. Profit after tax in the last three months decreased by 64%, reaching only VND1,448 billion. However, this figure was 3.8 times higher than in the first quarter of this year.

In the first half of the year, Hoa Phat recorded VND56,665 billion in revenue, down more than 30%. Gross profit narrowed significantly due to high cost of goods sold, down 70% compared to the first half of 2022. This result is the main reason why the "steel king"'s net profit in the first two quarters of this year only reached over VND1,800 billion, equal to 15% compared to the same period last year.

Amid weak domestic and foreign market demand, Hoa Phat said it produced 2.86 million tons of crude steel, down 34% compared to the first half of 2022. Sales of construction steel, steel billets and hot-rolled coil (HRC) reached 2.9 million tons, down 27%.

In product segments, Hoa Phat construction steel reached more than 1.6 million tons, down 30%. In addition to finished steel, Hoa Phat supplied 36,000 tons of steel billets to other steel rolling mills in Vietnam. HRC steel supplied to domestic and foreign markets reached 1.2 million tons, down 15%. Hoa Phat steel pipes and corrugated iron sheets also decreased slightly compared to the same period last year.

In business segments, the home appliance sector was more positive as Funiki air conditioner output increased by 50% over the same period. Other Hoa Phat products such as refrigerators, freezers, water purifiers, cooling fans, induction cookers, and dishwashers also grew well.

Regarding real estate, the Group continues to invest in expanding existing industrial parks. The total land fund of Hoa Phat's industrial parks approved for planning is more than 1,133 hectares.

By the end of the second quarter, Hoa Phat Group's total consolidated assets reached over VND176,000 billion, a slight increase compared to the beginning of the year. Liabilities recorded over VND78,400 billion, accounting for 44% of total capital.

Currently, the group's investment focus is the Hoa Phat Dung Quat 2 Iron and Steel Complex project, with a capacity of 5.6 million tons of HRC per year. After more than a year of implementation, the project has completed about 30% of the work volume. It is expected that the Dung Quat 2 project will produce products in 2025.

Minh Son

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