Mixed profit targets for rubber businesses despite price hikes

Both global synthetic and natural rubber prices are on an upward trend, but not all businesses in the industry are enough confident to set higher profit targets for this year.

The Southern Rubber Industry Joint Stock Company (CSM) sets profit before tax at VNĐ101 billion, up 83 per cent compared to 2021. — Photo courtesy of the company

Both global synthetic and natural rubber prices are on an upward trend, but not all businesses in the industry are enough confident to set higher profit targets for this year.

Compared to the beginning of April, the price of this item has increased by 9 per cent. Trading Economics also forecast that the increase in rubber prices will not stop until the end of the first quarter of 2023 and may reach 310.84 yen per kilo.

The price of crude oil on the world market has increased in recent times, pulling up the price of synthetic rubber – a petroleum product.

The rubber supply was also affected after the Organisation of Petroleum Exporting Countries (OPEC) said that the world would not be able to replace about seven million barrels of oil and other liquids lost per day from Russia.

On April 18, 2022, benchmark US crude oil for June delivery was $113.2 per barrel and New York's main contract, light sweet crude for delivery in May, was $107.93 per barrel.

The price of natural rubber is also supported by world demand in 2022, which is expected to increase by 1.2 per cent compared to 2021, to 14.2 million tonnes.

According to the General Department of Customs, in the first three months of 2022, rubber exports reached 406,800 tonnes, worth $715.39 million, up 0.3 per cent in volume and 6.2 per cent in value over the same period of 2021.

The price trend is likely to increase in the next few months due to the seasonal shortage of supply, according to the forecast of the Việt Nam Rubber Association,

Besides favourable factors from the market, the natural rubber industry is also under certain pressures. The shortage of containers, high transportation costs and slow customs clearance will affect rubber demand.

After a year of failing to complete the annual plan, the Southern Rubber Industry Joint Stock Company (CSM) has set a business plan for 2022 with strong growth. CSM expects revenue to reach VNĐ4.95 trillion, a slight increase of 2 per cent over the same period last year, but profit before tax is expected to reach VNĐ101 billion, up 83 per cent compared to 2021.

To realise the target, CSM managers said that the company will maintain production to meet market demand, including both domestic and exports, at the same time, increase labour productivity for existing product groups, especially investing in small equipment to complete a number of stages in the production line of motorcycle tyres, motorcycle tubes, bias tyres, and auto tubes.

Phước Hòa Rubber Joint Stock Company (PHR) also sets a positive growth target this year with a revenue target of more than VNĐ2.25 trillion and profit after tax of VNĐ744 billion, up 16 per cent and 56 per cent respectively, compared to 2021.

Meanwhile, the DakLak Rubber Investment JSC (DRI) targets total revenue of VNĐ599.6 billion in 2022, a slight increase compared to 2021, but profit after tax is expected to decrease by 5.7 per cent to VNĐ79.2 billion.

DRI Chairman of the Board of Directors Nguyễn Viết Tượng said DRI is managing an area of ​​over 8,800 hectares of rubber plantations in Laos with loans mainly in Lao kip. By the end of 2021, DRI's total debt was more than VNĐ256 billion, so the company would be at risk in exchange rates. In case the kip depreciates, DRI's revenue will also be affected. In addition, logistics costs will become high due to the sharp increase in raw material prices, which is also a disadvantage for DRI.

Đà Nẵng Rubber Joint Stock Company (DRC) also forecasts revenue in 2022 to decrease slightly to VNĐ4.4 trillion and profit after tax to decrease by 12 per cent to VNĐ256 billion compared to the previous year.

DRC said it still faced a labour shortage at some production stages because of the COVID-19 pandemic; empty containers and high rental prices; and high transportation costs which cause the purchase price of raw materials to increase sharply. In particular, the conflict between Russia and Ukraine caused oil prices to rise, pushing up prices of raw materials and goods, and DRC's import and export activities into these two markets were also disrupted.

This year, DRC will focus on products that are the company's strengths in the domestic market to improve production and business efficiency such as off–the-road (OTR) tyres and construction tyres. DRC's goal is to cover all segments in the domestic market as well as increase sales opportunities in export markets.

Positive first quarter

Plenty of rubber companies have recorded positive Q1 earning results compared to the previous year.

In the first quarter, thanks to a sharp increase in the selling price of finished products compared to 2021, DakLak Rubber Investment JSC (DRI) recorded net revenue of VNĐ134 billion, up 8 per cent, in which, revenue from finished rubber products reached VNĐ130.6 billion, the rest was from bananas and cashews.

The company's profit after tax was VNĐ20.8 billion, up 27 per cent year-on-year. With the results achieved, DRI has completed 22.3 per cent of the year’s revenue target and 26 per cent of the profit target.

Phước Hòa Rubber Joint Stock Company (PHR) said that in the first quarter of this year, the parent company recorded net revenue of VNĐ302.6 billion, up 25 per cent compared to the same period in 2021, but profit after tax reached VNĐ240 billion, 11.3 times higher than the same period last year and completed 33 per cent of the yearly plan.

Đà Nẵng Rubber Joint Stock Company (DRC) earned net revenue of VNĐ1.28 trillion in Q1, profit before tax of VNĐ81.7 billion, up 40.6 per cent and more than 3 per cent, respectively. Entering the second quarter, the company set a business plan similar to the first quarter, with net revenue of 1.25 trillion, profit before tax reaching VNĐ80 billion.

Source: VNA
vietnamnews.vn

Related News

Sharing responsibility for ensuring security and safety of the supply chain

Sharing responsibility for ensuring security and safety of the supply chain

VCN – Post - clearance audit is carried out in a planned, focused and key manner, avoiding widespread and ineffective inspections, thereby creating convenience for the business community and improving the effectiveness of state management of customs.
Quang Ninh Customs: Innovation in developing Customs-Business partnership

Quang Ninh Customs: Innovation in developing Customs-Business partnership

VCN - Quang Ninh Customs Department is determined to improve the quality of Customs-Business partnership, with practical actions in supporting and accompanying businesses.
Digital transformation in Customs sector is a revolution

Digital transformation in Customs sector is a revolution

VCN - This content was emphasized by Deputy Director General Tran Duc Hung at the Workshop introducing the requirements of technical process serving the construction of the Information Technology (IT) System to implement Digital Customs organized by the General Department of Customs on October 24, 2024.
An Giang Customs announces businesses with tax arrears

An Giang Customs announces businesses with tax arrears

VCN - An Giang Customs Department has just announced 25 businesses with tax arrears worth over VND6.2 billion.

Latest News

Import and export are expected to reach 800 billion USD

Import and export are expected to reach 800 billion USD

VCN - Although the import and export turnover of goods slowed down in September 2024, in general, import and export activities, especially exports, still grew positively in the first 9 months of 2024. It is expected that import and export of goods in 2024 will reach a record of 800 billion USD.
Fresh coconuts quenching new overseas markets

Fresh coconuts quenching new overseas markets

Vietnam’s fresh coconuts are being increasingly consumed in international markets such as the US, China, and the UK, highlighting a bright spot in Vietnam's fruit export sector with many opportunities for breakthroughs in the near future.
Rice exports likely to set new record in 2024

Rice exports likely to set new record in 2024

Vietnam sold 800,000 tonnes of rice overseas for 505 million USD in October, bringing the country's total export volume and value in the first ten months to nearly 7.8 million tonnes and 4.86 billion USD, up 10.2% and 23.4% year-on-year, respectively.
Vietnamese goods conquer halal market through trust and quality

Vietnamese goods conquer halal market through trust and quality

VCN - According to the Ministry of Agriculture and Rural Development, Vietnam's capacity to export over 50 billion USD worth of agricultural products annually, coupled with established supply chains, provides a significant advantage for Vietnamese agricultural and aquatic products to penetrate the Halal market.

More News

Exporters urged to have strategies to take advantage of UKVFTA for expansion

Exporters urged to have strategies to take advantage of UKVFTA for expansion

The UK is concerned by sustainable development, labour issues, environmental protection and social responsibility. Therefore, when exporting to the UK, enterprises should not just be concerned about being competitive in terms of price and quality.
Fresh coconuts quenching new overseas markets

Fresh coconuts quenching new overseas markets

Vietnam’s fresh coconuts are being increasingly consumed in international markets such as the US, China, and the UK, highlighting a bright spot in Vietnam's fruit export sector with many opportunities for breakthroughs in the near future.
Vietnam and UAE trade sees billion-dollar growth

Vietnam and UAE trade sees billion-dollar growth

VCN - According to General Department of Vietnam Customs by the end of September 2024, bilateral trade between Vietnam and the United Arab Emirates (UAE) reached nearly US$5 billion, an increase of more than US$1.4 billion over the same period last year.
Many factors affecting tuna exports in the last months of the year

Many factors affecting tuna exports in the last months of the year

VCN - Tensions between Israel and Iran escalate, tuna businesses are worried, they may have to stop export orders to the Israeli market in the last months of the year.
Vietnam still dominates Philippine rice import

Vietnam still dominates Philippine rice import

Vietnam continues to assert its dominance as the top rice exporter to the Philippines, with 2.91 million tonnes shipped as of the late October, or over 79% of the Philippines' total rice imports, according to the Vietnam Trade Office in the Philippines.
Vietnam cements ties with partners to engage in global semiconductor, AI industries

Vietnam cements ties with partners to engage in global semiconductor, AI industries

By boosting cooperation with reputable partners across the globe, Vietnam is taking steps to gain a foothold in the world’s semiconductor and artificial intelligence (AI) industries.
Aquatic exports expected to rise in year-end despite challenges

Aquatic exports expected to rise in year-end despite challenges

Aquatic exports is expected to surge in the remaining months of this year, as the year-end festive season comes, despite many challenges in the international markets, according to insiders.
Trade Defense: The Key to Success for Vietnamese Businesses

Trade Defense: The Key to Success for Vietnamese Businesses

VCN - From losses and near bankruptcy, many domestic enterprises have recovered thanks to timely application of trade defense measures. Trade defense is also an effective shield for Vietnamese enterprises against a series of lawsuits from importing countries, thereby maintaining advantages and developing on "away grounds".
Lao Cai Customs sees a triple-digit surge in export-import turnover

Lao Cai Customs sees a triple-digit surge in export-import turnover

VCN - Updated from the beginning of the year to October 24, total import and export turnover through Lao Cai Customs Department increased by 102%.
Read More

Your care

Latest Most read
Import and export are expected to reach 800 billion USD

Import and export are expected to reach 800 billion USD

VCN - At the regular Government meeting in September 2024, Minister of Industry and Trade Nguyen Hong Dien assessed: import and export continued to be a bright spot, recording a positive recovery compared to the same period last year.
Fresh coconuts quenching new overseas markets

Fresh coconuts quenching new overseas markets

Vietnam’s fresh coconuts are being increasingly consumed in international markets such as the US, China, and the UK, highlighting a bright spot in Vietnam's fruit export sector with many opportunities for breakthroughs in the near future.
Rice exports likely to set new record in 2024

Rice exports likely to set new record in 2024

Vietnam sold 800,000 tonnes of rice overseas for 505 million USD in October, bringing the country's total export volume and value in the first ten months to nearly 7.8 million tonnes and 4.86 billion USD, up 10.2% and 23.4% year-on-year, respectively.
Vietnamese goods conquer halal market through trust and quality

Vietnamese goods conquer halal market through trust and quality

According to the Ministry of Agriculture and Rural Development, Vietnamese agricultural and aquatic products could penetrate the Halal market.
Exporters urged to have strategies to take advantage of UKVFTA for expansion

Exporters urged to have strategies to take advantage of UKVFTA for expansion

The UK is concerned by sustainable development, labour issues, environmental protection and social responsibility. Therefore, when exporting to the UK, enterprises should not just be concerned about being competitive in terms of price and quality.
Mobile Version