Business Plan 2025 Faces Many Variables

Geopolitical tensions, monetary policy or policy changes in major countries can all affect businesses and make it difficult to build a 2025 business plan.

Insurance industry cautious

The final months of the year are a time for leaders to sit down and outline goals, actions, calculate necessary resources, as well as milestones and roadmaps for the coming year.

But during this planning season, many businesses are taking the time to review and adjust their 2024 business plans, even though the remaining days of the year are only a matter of days. Insurance companies, which rarely change their plans at the “last minute,” have seen a flurry of new business plans this year.

The reason is that compensation costs skyrocketed due to storm No. 3 ( Yagi ) - one of the strongest storms in the past 70 years, causing great damage in the northern provinces, paralyzing production activities and dramatically increasing compensation costs for insurance companies.

Most recently, Agribank Insurance (ABIC) consulted shareholders to adjust down 9% compared to the original revenue plan and reduce more than 29% of the 2024 profit plan after a loss in the third quarter.

Explaining this adjustment, ABIC said that due to a sharp increase of 93% in insurance compensation costs in the third quarter of 2024, the Company suffered a net loss of more than VND16 billion in the quarter. The loss from Typhoon Yagi not only made it difficult for ABIC to meet its profit target, but also directly affected its ability to achieve insurance revenue.

In addition to the sudden factor from storm No. 3, there were also negative factors affecting the insurance industry in general and ABIC in particular. In a report to shareholders, Mr. Nguyen Tien Hai, Chairman of the Board of Directors of ABIC, said that the public opinion crisis about the insurance industry from 2023 and changes in regulations under the Law on Credit Institutions amended in 2024 caused difficulties in implementing the sale of insurance products at branches of credit institutions, seriously affecting ABIC's business activities.

Similarly, Bao Minh Insurance (BMI) plans to hold an extraordinary general meeting of shareholders on December 27 to adjust down 29% of its 2024 profit plan, from VND377 billion to VND268 billion, also due to a surge in compensation reserve costs in the third quarter.

BIDV Insurance Company (BIC) - a rare enterprise that recorded profit growth in the third quarter of 2024 - did not adjust its profit target, but also reduced its insurance premium revenue plan by more than 7%.

Some other businesses have not yet announced new business plans, but it is likely that they will have difficulty completing their annual plans.

"Headache" with many variables

Up to now, a few businesses have officially announced their business plans to shareholders and investors. At the end of the 2024 fiscal year on September 30, Tan Binh Production, Trading, Import-Export, Services and Investment Joint Stock Company (code TIX - UPCoM floor) will hold its 2025 Annual General Meeting of Shareholders in early January 2025. According to the recently announced document, the Company's Board of Directors has built a 2025 plan on a cautious basis with a revenue target of VND 256.3 billion, down 3.7% compared to 2024; after-tax profit decreased by 6.6%, to VND 98.2 billion.

The Company's two key projects, the Social Housing Project and the Milky Way Apartment Project in Tan Binh II Industrial Park, certainly cannot pass legal documents in 2025. According to the report sent to shareholders, the basis for building the revenue target in 2025 will depend mainly on 2 activities, including stable revenue from the main business activities of Tan Binh Industrial Park (leasing factories, office buildings and some other premises...) and financial investment activities through capital investment activities, bond investment...

Hydropower - Power Joint Stock Company 3 (code DRL - HoSE) has just announced its financial and business production plan for 2025 and scheduled to hold its Annual General Meeting of Shareholders in early March next year. This hydropower enterprise aims for a slight growth of 1 - 2% in key indicators compared to 2024. Specifically, commercial electricity output will reach 75.3 million kWh; total revenue will reach VND97.8 billion; after-tax profit will reach VND42 billion. Overall, the above plan is still quite cautious after a year when many businesses in this industry benefited from favorable hydrological conditions.

The most notable highlight is that the Company plans to maintain a high dividend rate of 41%, a slight increase compared to 40% in 2024. Although the business plan has been specifically "set", the Board of Directors of Hydropower - Power Joint Stock Company 3 also noted in the submission that it may flexibly adjust the target based on the results of 2024 and actual developments in the coming time.

For manufacturing businesses that rely heavily on international markets, there are even more variables to consider. The impact of geopolitical tensions, monetary policies at central banks, interest rates and exchange rates that strongly impact input material prices, consumer markets, and output prices are all unknowns when building business scenarios for 2025.

Source: https://baodautu.vn/ke-hoach-kinh-doanh-nam-2025-doi-dien-nhieu-bien-so-d231776.html