GVR estimates after-tax profit of nearly 2,400 billion VND in the first 9 months of this year...
Mr. Le Thanh Hung - Member of the Board of Directors, General Director of VRG said that in the first half of this year, due to objective factors of climate change, especially prolonged drought, which greatly affected the latex harvest output and local labor shortages in some areas and prices, input costs for production continuously increased, so VRG's business results were not much higher than the same period in 2023.
However, entering the third quarter of 2024 until now, when rubber has entered the main exploitation season of the year, plus the rubber price trend has shown signs of recovery more positively than the planned forecast due to the unusual decline in supply in the main producing countries in Southeast Asia such as Thailand, Indonesia and increased demand from the two countries China and India, VRG's main and core business in the rubber sector has received many advantages.
Accordingly, in the first 9 months of this year, GVR recorded consolidated revenue and other income of VND 16,207 billion, achieving 65% of the annual plan. Profit after tax was VND 2,386 billion, achieving 69% of the annual target. In the third quarter alone, GVR's profit after tax is estimated at VND 801 billion, an increase of 62% compared to the third quarter of 2023.
GVR estimates that for the whole year of 2024, consolidated revenue and other income could reach VND26,307 billion (equal to 105.23% of the plan), after-tax profit of VND3,746 billion. "The Group estimates that it will complete and exceed the business plan assigned by the State Capital Management Committee at Enterprises and the General Meeting of Shareholders by 5-9%" - VRG General Director Le Thanh Hung said.
At the Parent Company - Group, in the first 9 months of 2024, total revenue reached 2,413 billion VND, profit 1,011 billion VND; it is estimated that in the whole year of 2024, the Parent Company - Group will have revenue of about 4,287 billion VND, estimated profit of 1,670 billion VND, exceeding the assigned plan by nearly 15%.
Mr. Le Thanh Hung - Member of Board of Directors, General Director of VRG.
Commenting on 2025, GVR leaders said that there are still many difficulties and challenges, so they will develop a suitable business plan. The Group expects that next year, revenue and other income will be about VND 27,490 billion, consolidated pre-tax profit will reach VND 4,632 billion and consolidated after-tax profit will reach VND 3,900 billion.
Mr. Le Thanh Hung also said that, in addition to traditional production and business fields, VRG will continue to expand investment fields outside of rubber according to the development strategy to 2030 and vision to 2035 approved by the State Capital Management Committee at enterprises, including high-tech agriculture, renewable energy (in addition to hydropower), industrial park real estate, etc.
Significant profits from land conversion
VRG has a very wide area of operation, spanning across the country and into neighboring Laos and Cambodia. The global shortage of natural rubber supply is driving rubber prices up significantly, creating favorable conditions for VRG's business operations.
The Association of Natural Rubber Producing Countries (ANRPC) has further lowered its forecast for natural rubber supply in 2024 from 14.54 million tonnes to 14.50 million tonnes due to the impact of unfavorable climatic conditions during the El Nino-La Nina transition phase, and widespread leaf fall disease negatively impacting rubber latex production and quality.
At the same time, smallholder rubber farmers in the world's three leading rubber producing countries, Thailand, Indonesia, and Malaysia, are not yet ready to expand their planting areas again due to labor shortages and the emergence of more valuable crops.
ANRPC warned that the situation could last until 2028, causing a global shortage of about 600-800,000 tons of rubber per year. Smallholder rubber farmers account for 85% of the world's total natural rubber supply.
In addition, the trend of converting rubber land is expected to positively support rubber prices in the medium and long term.
On the demand side, ANRPC adjusted up its forecast for global rubber demand this year from 15.67 million tonnes to 15.75 million tonnes with expectations that China's consumption demand will gradually recover as the government is implementing many policies to support economic growth.
With more than 394,700 hectares of rubber land spread across provinces and cities, VRG is currently the key player in the natural rubber market in Vietnam.
With more than 394,700 hectares of rubber land spread across provinces and cities, VRG is currently the key player in the natural rubber market in Vietnam. According to a recent assessment by MB Securities, VRG's average rubber price this year is expected to reach 36.8 million tons, up 14% compared to 2023. The total consumption output this year is estimated at about 500,000 tons.
Accordingly, VRG's rubber revenue this year is estimated at VND 18,347 billion, up 9% compared to 2023. At the same time, the gross profit margin of this segment is forecast to reach 29%, a sharp increase compared to 22% in 2023. Currently, the rubber production segment contributes 40 - 60% of VRG's total profit.
Thanks to that, VRG's consolidated pre-tax profit this year is forecast to reach VND5,564 billion, up 40% compared to 2023, according to MB Securities.
Meanwhile, according to SSI Research's estimates, for every 1% increase in rubber prices, VRG's gross profit from rubber production will increase by 0.22%, creating momentum for growth in the group's overall business results.
GVR has the advantage of owning a large area of rubber land, with a land fund of 394,782 hectares spread across provinces and cities, including Binh Duong, Dong Nai, Ba Ria - Vung Tau, Tay Ninh, etc. In the long term, converting more than 23,000 hectares of rubber land to industrial park land in the period of 2025-2030 will help the company record significant profits from land conversion.
It is known that VRG has been approved to convert rubber land into industrial park land with a total area of nearly 23,500 hectares, currently implementing nearly 11,000 hectares in a series of southern localities such as Tay Ninh, Binh Duong, Dong Nai and Ba Ria - Vung Tau. In the long term, converting rubber land into industrial park land will help GVR record significant profits.
With 16 industrial parks operating with a total land area of over 6,500 hectares, VRG is currently one of the largest industrial park developers in Vietnam.
By the end of 2023, the average occupancy rate at VRG's industrial parks will reach 73% and there are currently about 1,260 hectares of commercial land available for exploitation.
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