Inside a Tien Phong Plastic Joint Stock Company factory. The company's revenue increased 38 per cent to VND1.72 trillion (US$73.6 million) in Q2. — Photo courtesy of the company
Many plastic enterprises reported increased gross profit in the second quarter of this year thanks to lower raw material prices.
Binh Minh Plastics Company (BMP)’s revenue reached VND1.56 trillion (US$66.7 million) in Q2, up 7 per cent year-on-year. The company's profit after tax was 3.5 times higher than in the second quarter of 2021, mainly thanks to the significant improvement in gross profit margin from 12.9 per cent to 25.1 per cent. The business attributed the increase in profit to the decrease in the price of plastic raw materials and unchanged selling prices.
Tien Phong Plastic JSC (NTP) also recorded positive business results in Q2. Specifically, revenue increased 38 per cent to VND1.72 trillion ($73.6 million). Gross profit doubled to VND504 billion. Profit margin was 29.3 per cent, up sharply from 19.9 per cent in the second quarter of 2021. However, financial expenses and selling expenses both increased sharply, especially selling expenses quadrupled to VND232 billion, causing net profit to rise by 26 per cent to VND177 billion.
Viet Nam Plastic Corporation (VNP) reported second-quarter gross profit margin increased from 0.45 per cent to 3.6 per cent, gross profit reached VND2.4 billion, many times higher than VND316 million in the same period last year. However, the profit from joint ventures and associates decreased sharply from VND34 billion to VND11.5 billion, causing the company's net profit to decrease by 46 per cent compared to the same period last year to VND16.4 billion.
Dong A Plastic Joint Stock Company (DAG) announced second quarter revenue increased by 8 per cent to VND633 billion, net profit was VND5 billion, many times higher than VND393 billion in the same period last year. Gross profit margin increased from 4.4 per cent to 5 per cent.
According to Bloomberg data, the price of PVC resin, the main material for making plastic pipes and wires, has gradually cooled down after peaking at $1,850 per tonne at the end of October 2021. By the end of June, the price fell to $1,000 per tonne, down 46 per cent from the peak and to the price range in September 2020, 23 per cent lower than the same period last year.
BVSC Securities believes that a favourable PVC price will help Binh Minh Plastics Company (BMP)'s second half year earnings increase sharply. It business leaders said that they had no plans to adjust the selling price from now until the end of this year, which means that the selling price will remain at a high level after many upward adjustments in 2021.
On the other hand, consumption volume continued to recover thanks to more reasonable steel prices after many adjustments to boost civil construction and infrastructure activities in the second half of 2022, leading to an increase in demand for plastic pipes. At the same time, the company plans to increase market share in the Central and Central Highlands with a number of campaigns such as free shipping for orders over 50 million and events to introduce products and policies for project customers.
An Phat Holdings (APH) has two main business segments, plastic products and plastic resin trading. Therefore, the decrease in the price of plastic resins in the second quarter helped improve the profit margin of packaging, engineering plastics and construction plastics, but the plastic resin trading segment decreased.
The plastic resin trading segment accounted for 62-44 per cent of the group's total revenue, causing the overall gross profit margin to decrease. Specifically, the gross profit margin of the plastic resin trading segment decreased from 6 per cent in the second quarter of 2021 to 2.4 per cent, the plastic product production segment remained at 19.3 per cent. Overall profit margin decreased from 12.2 per cent to 9.1 per cent.
During the quarter, the group reported a 35 per cent increase in revenue to VND5.08 trillion, and a slight decrease in gross profit from VND450 billion to VND444 billion. Improved financial performance and reduced losses in joint ventures helped APH's net profit increase by 54 per cent to VND29 billion. VNS