Profits of enterprises exporting rice are different

Loc Troi's rice is on its way to Europe. Photo provided by enterprise

Statistics from the General Department of Customs show that Vietnam's rice exports reached 4.08 million tons in the first seven months of 2022, equivalent to a value of approximately US$2 billion, up 17.3% in volume and 6% in value over the same period in 2021.

Thus, although rice exports are quite competitive, Vietnamese products are still increasingly popular in the world market.

According to the Vietnam Food Association, in the last week of July 2022, the price of Vietnam's 5% broken rice traded at US$413 per ton, US$15 per ton higher than Thai rice and US$70 per ton higher than Indian rice, US$45 per ton higher than Pakistani rice. For 25% broken rice, Vietnam's rice is at US$393 per ton, US$4 per ton higher than Thai rice of the same type, US$65 per ton higher than Indian rice and US$43 per ton higher than Pakistani rice. Thus, the export price of Vietnam's rice is at the highest level in the group of major rice exporting countries in the world.

Although the situation of rice exports is positive, according to rice exporters, transportation and logistics costs are still very high and the increase in oil prices due to the influence of the Russia-Ukraine conflict, so even though the export of rice reached a high level but the profit is not very positive.

The business results recorded in the financial statements of the second quarter of 2022 of some enterprises have partly reflected this. Typically, revenue in the second quarter of 2022 of An Giang Import-Export Joint Stock Company (AGM) increased by more than 800% over the same period last year, reaching VND1,297 billion. However, profit after tax recorded a loss of VND28 billion, while the same period last year had a profit of VND3 billion.

According to the explanation of AGM General Director Huynh Thanh Tung, the company had boosted export sales, signed new contracts and increased export supply, helping to increase revenue very high. But the sharp increase in selling and logistics costs, it affected the company's efficiency.

In the first six months of 2022, AGM had a net loss of VND24 billion, while in the same period last year, it recorded a profit of more than VND4 billion.

At Loc Troi Group Joint Stock Company, consolidated net revenue in the second quarter of 2022 also increased by 30%, reaching VND3,547 billion, but profit after tax was negative VND46 billion, even though the same period last year had a profit of VND47 billion. The management board of Loc Troi said that the increase in operating expenses and financial expenses was the cause of the company's loss in the period.

The loss in the second quarter of 2022 led to reducing Loc Troi's accumulated profit in the first six months of 2022 to only VND137 billion, down 41% compared to the same period last year.

However, loss or decrease in profit is not common in all enterprises. In enterprises that manage costs well, profits still have a high growth rate. For example, at Southern Food Corporation (VSF), after a long period of losses, the company had a profit after tax of VND30 billion in the second quarter of 2022, while in the same period last year the company suffered a loss of VND63 billion.

Explaining this, Mr. Tran Tan Duc, Deputy General Director of VSF said that in the same period in 2021, the company was seriously affected by the Covid-19 pandemic, so the situation of rice production and consumption faced many difficulties. This year, the company has drastically focused on good cost management, fulfilling the target of new export contracts, so it has brought in profits. Accumulated in the first six months of 2022, VSF's after-tax profit was nearly VND31 billion, much better than the loss of VND142 billion in the first half of 2021.

Trung An Hi-tech Agriculture Joint Stock Company also achieved a consolidated net profit of VND23.5 billion, up 38% despite a slight decrease in revenue of 3% in the second quarter of 2022. Accumulated in the first six months, Trung An had a consolidated profit of nearly VND51 billion, up 168%.

Similarly, at Vietnam Seeds Corporation (NSC), net revenue in the second quarter of 2022 only increased by nearly 7% compared to the second quarter of 2021, reaching VND567 billion, but profit after tax increased to 32%, reaching VND86 billion. Accumulated in the first six months, NSC's profit after tax was VND123 billion, up 24%.