Vietnamese enterprises expect poor performance in Q1 due to weak macro data

March 09, 2023 - 18:38
Many enterprises forecast less optimistic business results in the first quarter of the year, due to weak domestic macro data in the first few months. 
Inside a warehouse of Digiworld. The company expects both revenue and profit to decline in the first quarter of 2023. Photo

HÀ NỘI — Many enterprises forecast less optimistic business results in the first quarter of the year, due to weak domestic macro data in the first few months. 

The global economy has started 2023 with uncertainties and challenges with inflation in many countries remaining at high levels despite showing signs of cooling down, hurting the Vietnamese economy and social situation.

The country's consumer price index grew 4.6 per cent year-on-year during the period, while the core inflation increased 5.08 per cent, said the General Statistics Office. Moreover, the index of industrial production fell 6.3 per cent, foreign investment declined by 38 per cent, and export turnover was down 10.4 per cent due to a reduction in orders. 

Thereby, many enterprises expect adverse business results in the first quarter. 

Particularly, the leading tyre producer Danang Rubber Joint Stock Company sets a target of VNĐ1.1 trillion (US$46.3 million) in net revenue and VNĐ70 billion in profit before tax, both down 14 per cent over last year. 

Bảo Việt Securities (BVSC) said that the company reported net revenue of VNĐ301 billion in January, a decline of 23 per cent year-on-year. The reduction was driven by seasonal factors and weaker demand affected by difficulties of the wider markets. 

However, leaders of the company said that there are signs of recovery of the domestic market in February and March. Even though the export market dropped by about 9 per cent to $10 million, it can reach $11 - 12 million a month in the remaining two months. 

Meanwhile, export volume was supported by growing demand in Brazil, and improvement in tyre orders in Asian markets such as Myanmar, Egypt and the Middle East since February.

Digiworld also forecasts that its first quarter's revenue will decrease by 43 per cent to VNĐ4 trillion, while net profit falls 38 per cent to VNĐ130 billion, following the downtrend of the fourth quarter of 2022.

Đoàn Hồng Việt, chairman of the Board of Directors of Digiworld, said that the demand for information and communication technology (ICT) equipment is at a low level due to signs of economic recession, causing consumers to reduce spending. On the other hand, during the COVID-19 pandemic, ICT products sold well and had not yet reached the replacement cycle.

Challenges remain until the second quarter, the head of Digiworld said, adding that recovery will begin in the second half of the year when the world economy is better, the Vietnamese export orders increase, and income improves, leading to an increase in purchasing power.

Đức Giang Chemical Group plans its first quarter's revenue to reach nearly VNĐ2.6 trillion with consolidated profit after tax of VNĐ700 billion, down 29 per cent and 53 per cent on-year, respectively. Therefore, Đức Giang Chemical's profit is forecast to continue to decline after peaking in the second quarter of 2022.

Mirae Asset said that China's zero-COVID policy from May 2022 - January 2023 caused a reduction in demand for semiconductor products, affecting the demand for yellow phosphorus - the company's main product. Therefore, the reopening of China's economy and production promotion of electronic devices will help semiconductor demand rebound, balancing Đức Giang Chemical's profit in the first half of 2023.

Meanwhile, after achieving positive results last year, LIX Detergent sets a negative target for the first quarter of the year with profit before tax down 9 per cent to VNĐ50 billion, while its revenue is almost flat. If it meets the target, the results will be the company's worst performance since the third quarter of 2021.

With difficulties in the cement market and packaging production industry, leaders of Vicem Packaging Bim Son set a target of only VNĐ261 billion in revenue in 2023 and VNĐ1.5 billion in profit before tax. In the first quarter alone, the company estimated revenue of VNĐ62 billion and a loss of VNĐ180 million. 

Although its business activities have not experienced outstanding performance since 2003, Vicem Packaging Bim Son never suffered a loss.

In the rubber industry, Tan Bien Rubber foresees a loss of VNĐ9 billion in the first quarter of this year, while the profit is unchanged over last year at VNĐ38 billion. 

According to data from the General Department of Customs, rubber prices decreased by 17 per cent on-year despite a recovery compared to the end of 2022. As of mid-February, rubber exports dipped 8 per cent in volume and 27 per cent in value.

VNDirect Securities Corporation considers the reopening of China's economy a very good opportunity for rubber prices and exports to recover. VNS