Half of the 30 bluechip companies recorded lower profits in the first three months of the year than in the same period in 2022, a higher decline than during the Covid-19 period.
The first quarter financial reports of bluechip companies (large-cap stocks that attract a lot of attention from investors) on the stock market showed the sharpest decline in profits in the past three years.
At the end of the first quarter, 15 out of 30 enterprises in the VN30 group recorded lower net profits than the same period last year. This rate is more than double that of 2022 and 2021, when the economy was affected by Covid-19.
The pressure on businesses in the first quarter of this year continues to be a lingering effect from the second half of last year with a decline in domestic and export demand, difficulties in the real estate market and access to capital. The impact has spread from real estate businesses (NVL, PDR), to retail (MWG, MSN), consumer goods (SAB, VNM), finance - banking (SSI, VPB) or manufacturing (HPG, GVR).
Novaland is the only blue-chip company to report a loss in the first quarter of this year. The market-leading real estate developer only earned over VND600 billion in revenue in the first three months of the year, less than a third of the same period last year. Net losses were over VND400 billion, compared to a profit of trillions in the same period in 2022.
At the end of the first quarter, the total assets of this enterprise were recorded at more than VND256,000 billion, a slight decrease compared to the end of last year. In particular, the capital structure was dominated by payables, reaching more than VND211,000 billion as of March 31.
In its 2022 audit report, PwC Vietnam - the financial statement auditor - stated that the assumption of solvency, debt restructuring and measures to generate sufficient cash flow to finance business operations has led to significant doubts about the group's ability to continue as a going concern. However, Novaland affirmed that it has sufficient working capital for business operations and is able to meet obligations due in the next 12 months (from April this year).
Mr. Bui Thanh Nhon, Chairman of the Board of Directors of Novaland, wrote in the annual report that "the company is temporarily facing short-term financial and liquidity difficulties" but he is confident that production and business activities will soon recover in the third quarter of this year.
In addition to Novaland, Phat Dat Real Estate (PDR) also recorded lower profits than the same period last year. In the first quarter of this year, the company's profits decreased by more than 90%, to just over VND22 billion. However, this figure is still more positive than the loss of more than VND200 billion in the last quarter of 2022.
Like Novaland, Phat Dat said its profits fell sharply due to the general difficulties of the whole market, especially the real estate industry. "Our business investment in real estate projects is not favorable," Phat Dat said.
In the retail and consumer goods group, the difficulty comes from the decline in demand. Mobile World (MWG) reported a 99% decrease in net profit compared to the same period, while Masan (MSN) also saw its profit decrease by nearly 80%.
This "giant" in the electronics and phone distribution segment of the retail chain recorded a 26% decrease in revenue compared to the same period in 2022, and a 36% decrease in gross profit due to narrowing gross profit margin. After deducting operating expenses, MWG's net profit was just over VND21 billion, compared to a profit of over VND1,400 billion in the same period last year.
With advantages in coverage and service quality, Mobile World often sets its selling price about 5-10% higher than other competitors in the industry, according to VCBS. This has led to superiority in both gross profit margin and net profit margin in recent years. However, since March this year, MWG has decided to follow a strategy of reducing selling prices to compete with competitors in the market. As a result, the company's gross profit margin narrowed to below 20% in the first quarter of this year.
Similarly, Masan's profits also narrowed in the first three months of the year, with net profit reaching just over VND430 billion, compared to nearly VND1,900 billion in the same period last year.
In the financial segment, Vietnam Prosperity Bank - VPBank had the highest profit decline in the banking group due to the impact of FE Credit, a company operating in the consumer finance sector. In addition to VPBank, the profit of Vietnam Technological and Commercial Bank - Techcombank was also lower than the same period last year as net interest income dropped sharply. Meanwhile, SSI - a top securities company - faced difficulties due to the sideways performance of the general market in the first three months of the year.
In the manufacturing sector, the difficulties of the real estate sector have had a strong impact on the steel industry, and Hoa Phat is no exception. The leading enterprise in the steel industry in terms of market share recorded a profit of less than 400 billion VND in the first quarter, down 95% compared to the same period last year. However, this figure is still more positive than the net loss of thousands of billions of VND in the last two quarters of last year.
Some other businesses also recorded a decrease in profits but with a low margin, such as Vinamilk, PV GAS or Sabeco.
Minh Son
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