Steel industry enterprises' inventories decrease but remain high

According to the financial statements of steel enterprises on the stock exchange, as of the end of June 2024, the total inventory value of steel enterprises is estimated at about 75,000 billion VND, a decrease of about 7,000 billion compared to the end of the previous quarter, but this number is still high.

Steel industry inventories decreased in the context of unfavorable world steel price trends, however, inventory levels at enterprises remain quite high, which will create considerable pressure on steel industry enterprises in the coming time.

Of which, Hoa Phat Group Joint Stock Company (Code: HPG) alone accounted for more than 53% of the inventory value at the end of the second quarter with VND 40,163 billion (including a provision for price reduction of VND 291 billion). Compared to the beginning of the year, the inventory of "Steel King" Hoa Phat increased by 16.4%, however, compared to the end of the first quarter of 2024, this figure decreased by 4.7%.

In the second quarter of 2024, Hoa Phat's consolidated net revenue reached VND39,555 billion, a sharp increase of 34% over the same period last year. Gross profit margin in this period improved from 10.8% to 13.2%. At the same time, financial expenses in the period decreased by 21% to VND1,065 billion. As a result, Hoa Phat reported a profit after tax of VND3,320 billion, 2.3 times higher than the same period last year. This is the highest profit of the enterprise since the third quarter of 2022.

In the first 6 months of the year, Hoa Phat recorded VND71,029 billion in revenue and VND6,189 billion in profit after tax, up 25% and 3.3 times over the same period, respectively. The company has completed more than half of its revenue target and about 62% of its profit plan for the year.

At Nam Kim Steel Corporation (Code: NKG), inventory as of the end of the second quarter of 2024 was VND 5,743 billion, the company has set aside a provision for inventory devaluation of VND 130 billion. Compared to the beginning of the year, Nam Kim Steel's inventory has not fluctuated significantly, but compared to the end of the first quarter, this figure has decreased slightly by 1.5%.

In the second quarter of 2024, Nam Kim's consolidated net revenue reached VND 5,660 billion, up 2.9% over the same period last year. Financial activities during the period brought Nam Kim Steel more than VND 113 billion in revenue, double that of the same period last year.

Meanwhile, financial expenses and business management expenses both decreased significantly, down 44% and 19.7%, respectively, to VND70 billion and VND32.6 billion. As a result, Nam Kim reported a profit after tax of more than VND219 billion, a sharp increase of 75% over the same period in 2023 and an increase of 46% over the first quarter of 2024.

In the first 6 months of the year, Nam Kim recorded revenue of VND10,951 billion, pre-tax profit of VND460 billion and after-tax profit of nearly VND370 billion. With this result, Nam Kim Steel has completed 109% of the profit target after the first half of the year.

Vietnam Steel Corporation - JSC (VNSteel, code: TVN) also recorded an inventory value of VND 4,984 billion. Compared to the beginning of the year, VNSteel's inventory increased by 23%, but compared to the end of the first quarter of 2024, this figure decreased by 8.2%.

In the second quarter of 2024, VNSteel's net revenue reached VND 10,076 billion, a sharp increase of 49% over the same period last year. After deducting cost of goods sold, VNSteel's gross profit in the period reached VND 318 billion, 3.7 times higher than the same period last year.

During the period, financial revenue decreased sharply, while sales expenses and business management expenses both increased significantly, up 84% and 26% respectively. As a result, VNSteel reported a profit after tax in the second quarter of VND130 billion, while in the same period last year the company lost VND349 billion.

In the first 6 months of the year, VNSteel's net revenue reached 17,590 billion VND, up 16.6% over the same period last year. Profit after tax reached 175 billion VND, in the same period last year the company lost 281 billion VND.

For Tien Len Steel Group Corporation (Code: TLH), as of the end of the second quarter, the company's inventory reached VND2,567 billion, up 6.4% compared to the beginning of the year, but this figure decreased by 6.3% compared to the end of the previous quarter.

In the second quarter, Tien Len Steel's net revenue reached VND1,634 billion, up nearly 33% over the same period last year. Cost of goods sold increased sharply by 42% to VND1,700 billion. Operating below cost of goods sold caused Tien Len Steel to have a gross loss of more than VND66 billion, while in the same period last year it made a profit of VND38 billion.

The company also recorded a loss of VND17 billion in joint ventures and associates, compared to a profit of over VND300 million in the same period last year. As a result, Tien Len Steel reported a loss after tax of over VND153 billion, compared to a profit of over VND5 billion in the same period last year. This is also the heaviest loss compared to other steel companies this period.

Accumulated in the first 6 months of the year, although net revenue increased slightly by 9% to VND 2,895 billion, Tien Len Steel still recorded a loss after tax of more than VND 152 billion.

Source: https://laodong.vn/kinh-doanh/ton-kho-cua-doanh-nghiep-nganh-thep-giam-nhung-van-o-muc-cao-1378929.ldo