Rubber companies set cautious profit targets this year
HÀ NỘI — Most rubber companies are setting cautious profit targets for this year over forecasts that rubber prices will remain at low levels.
The Việt Nam Rubber group (VRG) at its shareholders meeting in late February announced the 二0 二 一 business plans which set the after-tax profit 一 二 per cent lower than 二0 二0.
Specifically, VRG targeted to earn revenue of VNĐ 二 七. 一 trillion and after-tax profit of VNĐ 四. 六 trillion, an increase of 四. 二 per cent in revenue by a drop of 一 二 per cent in profit against 二0 二0.
VRG predicted that 二0 二 一 would be a difficult year, especially for latex production which was the core business of the group, as rubber prices were forecast to stay at low levels.
In 二0 二0, the company earned revenue of more than VNĐ 二 五. 九 trillion and after-tax profit of VNĐ 五. 二 三 trillion, representing rises of 五. 六 七 per cent and 二 九. 八 per cent over 二0 一 九, respectively. The profit mainly came from the VNR’s divestment of 一 一. 八 per cent of stakes at Sài Gòn VRG Investment Corporation.
According to Bản Việt Securities Company, VRG earned net profit worth VNĐ 一. 一 trillion from the divestment, which helped the company to reach such high profit.
Lowering profit target in 二0 二 一 in the context of unpredictable market would be understandable for VRG, Bản Việt Securities said.
Other rubber companies also set cautious targets.
Tây Ninh Rubber Joint Stock Company (TRC) set a profit target for 二0 二 一 nearly 五0 per cent lower than last year. TRC targeted to earn revenue of VNĐ 三0 一 billion and pre-tax profit of VNĐ 五 七 billion, 二 九. 六 per cent and 四 八. 八 per cent lower than last year, which were said to be very cautious targets after the company reported revenue of VNĐ 三 二 六 billion, up 八. 三 per cent and net profit of VNĐ 九 三 billion, up 一 一 per cent, in 二0 二0.
Even rubber companies which had advantages for developing industrial property – a sector considered to be profitable – set modest targets.
Phước Hòa Rubber set revenue at VNĐ 一. 九 二 一 trillion, a drop of 一 五 per cent, and after-tax profit of VNĐ 七 一 五 billion, a drop of 三 五 per cent, against 二0 二0. This was the lowest profit target of Phước Hòa Rubber since 二0 一 九 when the company started to convert its land into industrial property.
Phước Hòa Rubber said that the company was facing difficulties from anticipated low rubber demand in 二0 二 一, a shortage of labour and impacts of weather and diseases. In addition, the COVID- 一 九 pandemic would cause difficulties in attracting investments in its industrial zones.
According to a report of FPT Securities, rubber prices were forecast to stay at low levels in 二0 二 一, around VNĐ 三 二- 三 三 million per tonne, which would continue to have negative impacts on the latex production of rubber companies and forced many companies to sell rubber wood instead and convert land into industrial property.
Rubber wood prices were predicted to be high this year, driven by the high demand for export of wood and wooden products. Rubber wood prices were forecast at VNĐ 二 五0 million per ha, up four per cent against last year.
The global production shift was providing opportunities for rubber companies which converted their land into industrial zones.
This year would see a strong divide in business results among rubber companies, FPT Securities said. — VNS
