Sugar companies flourished with strong business performance in 2023

February 06, 2024 - 09:26
The Quảng Ngãi Sugar Company announced that sales increased by 73 per cent in 2023, with revenues exceeding VNĐ4.04 trillion, more than doubling the company's 2022 figures.
Thành Thành Công-Biên Hoà's increased 2023 revenues have given the company a healthy boost in profits. Photo Thành Thành Công-Biên Hoà

HÀ NỘI - Sugar companies improved business operations and boosted earnings in 2023.

The Quảng Ngãi Sugar Company announced that sales increased by 73 per cent in 2023, with revenues exceeding VNĐ4.04 trillion, more than doubling the company's 2022 figures. Its gross profits were 3.22 times higher in 2023 than the previous year, reaching nearly VNĐ1.21 trillion.

The company stated that consumer purchasing power had not yet fully rebounded following the pandemic, resulting in reduced consumption of products such as milk, mineral water, beer, and candy. However, profits in these categories remained relatively stable due to cost control efforts.

"Quảng Ngãi Sugar has invested in developing raw material areas for industrial production to increase sugarcane productivity and quality," said Võ Thành Đàng, the company's general director. "The sugar production line is now operating steadily, helping reduce costs and lower product prices."

Đàng also acknowledged that trade defence measures and effective control of smuggled sugar products had contributed to the sector's efficient performance.

Thành Thành Công-Biên Hoà, another major enterprise in the sugar industry, also experienced increased revenue and market share.

In Q4 2023, the company's revenue reached VNĐ7.02 trillion, while its profit margin soared from 7.6 per cent to 10.6 per cent, resulting in a 40 per cent increase in gross profit.

Thành Thành Công-Biên Hoà attributed this improvement in gross profit margin to a shift in its agricultural value chain revenue structure. The company's net profit in Q4 2023 reached VNĐ142 billion, 50 per cent higher compared to the same period in 2022.

Shareholders have yet to reap the rewards of these reported profit increases. The share prices of Quảng Ngãi Sugar (QNS), Sơn La Sugar (SLS) and Thành Thành Công-Biên Hoà (SBT) have all decreased in the last six months.

Global sugar prices have been on a downward trend since November 2023. They declined to 20.5 US cents per pound at the end of December 2023, a 21.3 per cent decrease compared to the beginning of the quarter.

According to Vietcombank Securities Company (VCBS), sugar prices in Việt Nam dropped to VNĐ21,200 per kilogramme by the end of Q4 2023, but this was still higher than prices were at the start of that year.

Other sugar businesses have recently taken on higher levels of debt as they scaled up their business activities. These increases in debt are reflected in their listed share prices. VNS