Profits of Honda’s parts suppliers skyrocket last year

An assembly line of VEAM. — Photo congthuong.vn

Along with the strong growth of Honda Viet Nam, its parts suppliers also recorded positive business results in 2022.

In the consolidated financial statement of the fourth quarter, Viet Nam Engine and Agricultural Machinery Corporation (VEAM) said that its net revenue reached over VND4.7 trillion (US$200.4 million) in 2022, up 18 per cent year-on-year. Its earnings per share (EPS) reached an unprecedented high at VND5,713.4.

VEAM is one of the major components suppliers for Honda Viet Nam. In 2022, the company’s sales for Honda Viet Nam jumped 33 per cent on-year to VND1.22 trillion, accounting for nearly 26 per cent of its total revenue.

Pho Yen Mechanical JSC (Fomeco), a subsidiary of VEAM, is also a partner supplying spare parts for Honda Viet Nam. Last year, Fomeco's revenue reached VND1.31 trillion, a gain of 23 per cent over 2021. Of which, the sales for Honda Viet Nam reached VND358 billion, accounting for more than 27 per cent of total revenue.

Fomeco's main products are ball bearings, motorcycle parts, auto parts, conveyor rollers, spare parts for the construction industry and other mechanical products. Other major customers of Fomeco are Yamaha, Suzuki, Hanwa, Nippo, Piaggio and Panasonic.

Its profit after tax doubled over 2021 to nearly VND66 billion. The company’s EPS was also at a high level of VND9,942.

Fomeco has spent about VND29 billion of its profit after tax on the bonus and welfare fund, which is almost half of the company's annual profit.

The Machinery Spare Part No.1 JSC (FUTU1), another subsidiary of VEAM, specialises in distributing spare parts for Honda Viet Nam. In 2022, FUTU1 posted a net revenue of VND1.06 trillion, a 36.5 per cent increase compared to 2021, resulting in a record profit after tax of VND76 billion, up 58 per cent.

Established in 1996, Honda Viet Nam is one of the leading companies in the field of motorcycle and automobile manufacturing in the Vietnamese market.

Last year, the vehicle giant sold more than 2.4 million motorbikes, up 20.9 per cent over 2021 and occupies more than 80 per cent of the Vietnamese motorcycle market shares. Honda's automobile segment also recorded outstanding growth with more than 30,600 vehicles sold, a rise of 41.2 per cent year-on-year. — VNS