Hoa Phat posted after-tax profit of VND2 trillion in Q2

Hoa Phat Group (HPG) achieved postive business results in the second quarter of the year with revenue of VND15.3 trillion and after-tax profit of VND2 trillion despite of increasing input prices. In the first half of the year, the group met with 58 per cent of the whole year’s profit set target with VND3.86 trillion.

The information was released by Hoa Phat Group’s chairman at the meeting with strategic investors on July 25^th 2019. The meeting was online in Hanoi and HCM City with participation of some 150 investors, representatives of funds and stcok companies.

Hoa Phat Group’s chairman Mr Tran Dinh Long said: “Concerns are important but we would overcome difficulties and completing all tasks”.

High business results and meeting with set targets

The chairman said: “Never before has the steel industry in the world and Vietnam had such difficulties. Iron ore prices exceed US$120 USD per tonne, nearly double the same period last year. Under such conditions, the results of Hoa Phat are quite good and meet the plan”.

In the first six months of the year, Hoa Phat construction steel output supplied to the market reached more than 1.34 million tonnes, an increase of 22.9 per cent compared to the same period last year. Exports of construction steel posted 35 per cent year-on-year increase. With this result, Hoa Phat Steel maintained its leading position in the steel market with market shares of 25 per cent. In the first half of 2019, Hoa Phat Steel Pipe sold 363,200 tonnes of steel pipes, up 15.6 per cent over the corresponding period last year, holding the leading market share in Vietnam with nearly 30 per cent. It is expected that in October, Hoa Phat will start offering large size steel pipes up to 325mm, the largest in the market.

Hoa Phat started supplying post-tensioned steel products which Vietnam had to import completely before. Notably, the product has been given many orders from foreign partners.

In the agriculture and real estate sectors, Hoa Phat has continued to completing farms and projects to create new growth momentum in the upcoming time. For hi-tech agricultural sector, Hoa Phat is taking the lead in providing Australian beef in Vietnam with market shares of more than 50 per cent. Its occupancy rate of industrial parks also saw strong growth against the same period last year. The rental areas and value in the first half of the year was nearly the same with that of whole last year.

Dung Quat project strives to sell out all products

In addition to business results, investors raised many questions regarding the progress, competitive advantages and sales plan for Dung Quat project, how high prices of ore affects production. By the end of June, Dung Quat Complex project basically completed the first phase. From the beginning in July, it started to have testing run of the blast furnace and steel rolling line. Progress of Dung Quat project is currently reaching the set target. It is expected that in March 2020, HPG will produce hot rolled steel.

Dung Quat Hoa Phat iron and steel integrated complex has been in scheduled progress

Hoa Phat Group’s chairman Tran Dinh Long also said Hoa Phat has carefully prepared the consumption plans from warehousing, market and branding. Hoa Phat has invested in building its port in Dong Nai and Can Tho provinces to ensure the supply of products fastly. The group will focus on the Southern market from 2020.

At the Southern customer meeting held for the first time last week, the chairman committed with distribution agents to make the best support policies to meet all needs of the market. “Concerns are important but we would overcome difficulties and completing all tasks,” Mr. Long said.

Regarding forecasts of ore prices and year-end business results, Mr.Long said that Hoa Phat always has a long-term plans. So it can prepare materials from various sources to minimise the impact of supply and demand market.

“Recently, if the prices of ore had not increased, the business results of Hoa Phat would be higher, but with such ore prices, the result was good. The last 6 months of the year may still be difficult because the real estate market is slowing down. However, if there is no big change, Hoa Phat is confident to complete and exceed the profit plan for 2019, ” the chairman said.

Nghi Tran