HA NOI (VNS) — Only four out of the 15 steel companies listed on exchanges reported growth in profits in the first quarter this year, while the rest suffered losses or declining profits.
The statistics of Vietstock.vn showed that steel companies were in trouble.
According to Phan Dung Khanh, investment consultancy director of Maybank Kim Eng Securities, high inventories and difficulties in sales were the major problems that the steel companies encountered.
Four companies with growing profits were the Hoa Phat Group (HPG), the Steel Structure Manufacture Joint Stock Company (SSM), the Viet Nam Germany Steel Pipe Joint Stock Company (VGS) and the Dai Thien Loc Corporation (DTL).
Meanwhile, a giant in steel production, the Hoa Sen Group (HSG) reported a two-thirds fall in profits year over year in the first quarter of this year, totalling just VND68 billion or $3.2 million.
The Tien Len Corporation (TLH), Viet Nam–Italy Steel (VIS), the Nam Kim Group (NKG) and the Dana Y Steel Company (DNY) also witnessed declining profits in the first three months.
Worse, the Nam Vang Corporation, listed on the Ha Noi Exchange as NVC, incurred losses of more than VND13 billion or $619,000 in the first quarter and also in the nine consecutive months from the last quarter of 2011.
The aggregated losses of the Nam Vang Corporation as of the end of March reached VND364 billion or $17.3 million. The stock was compulsorily delisted from the exchange on Monday as it has been reporting losses for three consecutive years.
The HCM City-listed Huu Lien A Chau (HLC) also posted a VND152 billion or $7.2 million loss in the first quarter this year. The other loss-making firms included Bac Viet Steel Jsc. (BVG), Pomina Steel Company (POM) and Dong Nai Roofsheet and Construction Material Jsc. (DCT), Vietstock's statistics showed.
The causes for the declining profits were varied, ranging from high depreciation, increasing input costs, soaring transportation costs to interest burdens, companies said.
The steel production sector faced difficulties together with a sluggish property market. Although the construction market was seen recovering in recent months, the high steel inventories remained a burden, which Vietstock estimated to be worth VND20.2 trillion or $962 million as of the end of March. — VNS