Plastic enterprises report profit increases in Q2
Many plastic enterprises reported increased gross profit in the second quarter of this year thanks to lower raw material prices.
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| Inside a Tien Phong Plastic Joint Stock Company factory. (Photo courtesy of the company) |
Binh Minh Plastics Company (BMP)’s revenue reached 1.56 trillion VND (66.7 million USD) in Q2, up 7% year-on-year. The company's profit after tax was 3.5 times higher than in the second quarter of 2021, mainly thanks to the significant improvement in gross profit margin from 12.9% to 25.1%. The company attributed the increase in profit to the decrease in the price of plastic raw materials and unchanged selling prices.
Tien Phong Plastic JSC (NTP) also recorded positive business results in Q2. Specifically, revenue increased 38% to 1.72 trillion VND (73.6 million USD). Gross profit doubled to 504 billion VND. Profit margin was 29.3%, up sharply from 19.9% in the second quarter of 2021. However, financial expenses and selling expenses both increased sharply, especially selling expenses quadrupled to 232 billion VND, causing net profit to rise by 26% to 177 billion VND.
Vietnam Plastic Corporation (VNP) reported second-quarter gross profit margin increased from 0.45% to 3.6%, gross profit reached VNĐ2.4 billion, many times higher than 316 million VND in the same period last year. However, the profit from joint ventures and associates decreased sharply from 34 billion VND to 11.5 billion VND, causing the company's net profit to decrease by 46% compared to the same period last year to 16.4 billion VND.
Dong A Plastic Joint Stock Company (DAG) announced second quarter revenue increased by 8% to 633 billion VND, net profit was 5 billion VND, many times higher than 393 billion VND in the same period last year. Gross profit margin increased from 4.4% to 5%.
According to Bloomberg data, the price of PVC resin, the main material for making plastic pipes and wires, has gradually cooled down after peaking at $1,850 per tonne at the end of October 2021. By the end of June, the price fell to $1,000 per tonne, down 46% from the peak and to the price range in September 2020, 23% lower than the same period last year.
BVSC Securities believes that a favourable PVC price will help Binh Minh Plastics Company (BMP)'s second half year earnings increase sharply. It business leaders said that they had no plans to adjust the selling price from now until the end of this year, which means that the selling price will remain at a high level after many upward adjustments in 2021.
On the other hand, consumption volume continued to recover thanks to more reasonable steel prices after many adjustments to boost civil construction and infrastructure activities in the second half of 2022, leading to an increase in demand for plastic pipes. At the same time, the company plans to increase market share in the Central and Central Highlands with a number of campaigns such as free shipping for orders over 50 million and events to introduce products and policies for project customers.
An Phat Holdings (APH) has two main business segments; plastic products and plastic resin trading. Therefore, the decrease in the price of plastic resins in the second quarter helped improve the profit margin of packaging, engineering plastics and construction plastics, but the plastic resin trading segment decreased.
The plastic resin trading segment accounted for 62-44% of the group's total revenue, causing the overall gross profit margin to decrease. Specifically, the gross profit margin of the plastic resin trading segment decreased from 6% in the second quarter of 2021 to 2.4%, and the plastic product production segment remained at 19.3%. Overall profit margin decreased from 12.2% to 9.1%.
During the quarter, the group reported a 35% increase in revenue to VNĐ5.08 trillion, and a slight decrease in gross profit from 450 billion VND to 444 billion VND. Improved financial performance and reduced losses in joint ventures helped APH's net profit increase by 54% to 29 billion VND.
(Source: VNA)
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