Rubber industry experiences strong profit growth in 2021

Workers collecting latex at a rubber plantation in Gia Lai. VNA/VNS Photo

Rubber is one of the industries posting good performance despite many sectors struggling due to the COVID-19 pandemic.

In its fourth-quarter financial statement, Vietnam Rubber Group (GVR), one of the leading rubber companies in Việt Nam, said that its net revenue rose 6,6 per cent year-on-year to VNĐ9.6 trillion (US$4.2 million). Of which, revenue from producing and trading latex still plays a key role, with a gain of nearly 19 per cent to VNĐ7.46 trillion.

In addition, the wood processing segment also brought back more than VNĐ1 trillion in revenue.

While other business segments recorded growth, the real estate and infrastructure businesses reported a decrease of 47 per cent to VNĐ183 billion.

However, as there was no longer profit from the pestment of member companies and liquidation of rubber plantations, its profit after tax in the fourth quarter of 2021 declined by 44 per cent to nearly VNĐ1.8 trillion.

For 2021, the company’s net revenue reached VNĐ26.35 trillion, up nearly 25 per cent compared to 2020. It resulted in a gain of 10 per cent in profit after tax to VNĐ5.6 trillion, completing and exceeding 23 per cent of the plan.

Even though Vietnam Rubber Group had the highest profit last year, Đổng Phú Rubber JSC (DPR) was the one with the largest growth in terms of profit.

Despite posting a fall of 3.5 per cent over the same period of 2020 in revenue, the company’s profit after tax was still four times higher at VNĐ330 billion thanks to other incomes totalling more than VNĐ229 billion.

Accumulated in 12 months of 2021, Đồng Phú Rubber’s net revenue reached VNĐ1.2 trillion, up 6.8 per cent on-year, with revenue from the latex business being VNĐ860 billion, accounting for around 71 per cent of its total revenue.

Revenue from the liquidation of rubber trees reached VNĐ122 billion.

Therefore, its profit after tax jumped 132 per cent to VNĐ491 billion. The company’s earnings per share (EPS) was also in the top at VNĐ10,752.

Tabiruco (RTB) is also a business witnessing strong profit growth.

In 2021, its net revenue reached VNĐ889.3 billion, up 32.5 per cent over 2020. With profit before tax up 3 times higher than the yearly target, the company’s profit after tax doubled to VNĐ379.6 billion.

Similarly, Baruco (BRR) recorded a rise of 27.2 per cent in net revenue to VNĐ500 billion, resulting in an increase of 34.2 per cent in profit after tax to VNĐ146 billion. With the business results, Baruco exceeds 20.5 per cent of the profit target set for the whole year.

Victory is not for all

On the contrary, Phước Hoà Rubber JSC (PHR), also one of the leading producers in the industry, reported a decline of 11 per cent in net revenue of the last quarter of 2021 to nearly VNĐ663 billion, with profit after tax down 40 per cent to VVĐ237.5 billion.

For the whole year, its net revenue still rose by over 19 per cent to VNĐ1.9 trillion.

However, in 2021, as there was no other income, its profit after tax edged down 48.6 per cent year-on-year to VNĐ578 billion.

Another name leaving a huge impact for investors last year was Quảng Nam Rubber.

Four years ago, in 2017, the company suddenly reported a loss of nearly VNĐ1.2 trillion, with revenue of only tens of billions of dong.

Since then, it has generated almost no revenue, or only a small amount which was less than VNĐ10 billion.

In both 2020 and 2021, Quảng Nam Rubber did not generate revenue, losing VNĐ65 billion and VNĐ50 billion, respectively.

Therefore, accumulated to December 31, 2021, it lost VNĐ1.36 trillion, with equity down to VNĐ167 billion.

Last year, the company also experienced many ups and downs with changing its name and business lines twice.

Of which, in May 2021, the company changed its name from Quảng Nam Rubber to Việt Trung Viet Investment and Development JSC, and transformed its core business from planting and trading rubber to real estate.

Then, at the end of 2021, the company changed its name again to Tây Bà Nà Group JSC, but kept its stock symbol of VHG.

Positive outlook in 2022

Vietnam Rubber Group said that the country's rubber industry will benefit from both export volume and value due to tight global supplies, especially in Southeast Asia as the region is severely affected by the weather, leading to a decrease in the production of natural latex.

Therefore, the price of latex is expected to continue to rise sharply.

A report from the Import-Export Department, under the Ministry of Industry and Trade showed that the country’s rubber price increased slightly last month. VNS