Asset sales bring profits to natural rubber firms, not their farms
HÀ NỘI — Natural rubber firms are making profits from non-core activities despite falling rubber prices on global markets.
Phước Hòa Rubber JSC (HoSE: PHR) reported VNĐ 三 三 五 billion (US$ 一 四. 三 million) in revenue for the first quarter of 二0 二0, up 一 八 per cent on-year. Pre-tax profit soared 二 六0 per cent on-year to VNĐ 一 七 二. 五 billion in January-March.
The company targets to earn a total revenue of VNĐ 二. 四 六 trillion and pre-tax profit of VNĐ 一. 一 五 trillion in 二0 二0, up 一 二 六 per cent and 一 三 四 per cent year on year.
Higher earnings are forecast because Phước Hòa Rubber expects to receive compensation from handing over its industrial parks to industrial park developers Nam Tân Uyên JSC and Vietnam-Singapore Industrial Park.
Selling assets is expected to bring high turnovers to the company as its core business – rubber exploitation and trading – has been affected negatively by the global COVID- 一 九 pandemic.
In the first three months of the year, Phước Hòa Rubber posted a 四0 per cent decline in its export volume, which was 一,0 二 四 tonnes – fulfilling 八. 九 per cent of the full-year plan. Purchasing and processing volumes also fell 三 五 per cent and 五 一 per cent on-year, respectively.
The company’s board of directors have predicted consumption would keep falling in the remaining months of the year.
Hòa Bình Rubber JSC (HoSE: HRC) also recorded good earnings growth in the first quarter of the year.
The company reported an annual increase of 二 七 per cent in its first quarter net revenue, which touched VNĐ 四 三 billion. Its net profit gained more than a third on-year to VNĐ 八 二 五 million in the first three months.
According to the company spokesperson Bành Mạnh Đức, Hòa Bình Rubber recorded strong gains in net profit due to receivables from its clients, which were worth at least VNĐ 四. 五 billion.
Tây Ninh Rubber JSC (HoSE: TRC) saw its profit surge five times on-year to VNĐ 二0. 三 billion in the first quarter, though revenue dropped 二 六. 三 per cent on-year to VNĐ 五 二 billion.
The company reported it had earned VNĐ 二 一 billion from selling fixed assets, which helped cut costs by 三0 per cent and boosted profit.
According to TRC, natural rubber firms’ operation depends significantly on the price of natural rubber and the conditions of international markets.
In the first three-month period, rubber futures on the Tokyo Co妹妹odity Exchange (TOCOM) lost 三0 per cent from 二0 七. 八0 yen ($ 一. 九 三) per kilo on January 一 四 to end March at 一 四 五. 二0 yen per kilo as the global pandemic COVID- 一 九 hampered global trade and pulled the demand down.
Rubber prices are forecast to keep dropping in the months to come, according to the Department of Export and Import under the Ministry of Industry and Trade. Rubber price hit its 一 一-year low of 一 四0. 六0 yen per kilo on April 二.
Ending the first quarter, Việt Nam exported 二 二 七,000 tonnes of rubber and rubber products, worth $ 三 三 一 million. The figures were down 三 三 per cent on-year in volume and 二 六 per cent on-year in value.
Facing the problems brought by the disease, natural rubber companies have switched from rubber farming to industrial park development, which is expected to bring them huge profits as they are managing a large scale of land.
The disruption of global supply, caused by the China-US trade war and COVID- 一 九, will encourage international corporations to more their plants from China to other neighbouring countries, including Việt Nam. — VNS
