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Hoa Phat Group profits due to rising steel sales

Update: July, 18/2015 - 09:08

HA NOI (VNS) — The Hoa Phat Group has posted consol-idated revenue of more than VND13.6 trillion (more than US$623.4 million) for the first half of this year.

It earned a consolidated profit of more than VND1.9 trillion (more than $87.09 million) during the same period.

It has thus achieved 61 per cent and 83 per cent of its revenue and profit targets, respectively, for the year.

Sales of the group's two major products, construction steel and steel pipes, contributed the most to its H1 growth.

According to the group's report, it sold 675,000 tonnes of construction steel, seeing a 52 per cent year-on-year increase. It controlled 22.1 per cent of the steel market in the first half of the year.

Meanwhile, 196,000 tonnes of steel pipes were sold in the first six months of 2015, which is a 44 per cent year-on-year increase. This helped the group consolidate its top position in the country, with a market share of nearly 22 per cent.

In the second quarter of 2015, it earned quarterly revenue of more than VND7.7 trillion (nearly $353 million) and more than VND1.25 trillion ($57.45 million) in profit, an increase of 15 per cent and 30 per cent, respectively, over the same period last year.

The group's real estate business also showed positive signs. Some 20 per cent and 42 per cent, respectively, of the Pho Noi A and Hoa Mac Industrial Zones in Hung Yen and Ha Nam Provinces have been rented by local and international firms. In addition, most of the apartments in its Mandarin Garden residential project in Ha Noi have been sold.

Hoa Phat is currently constructing basements in an office and apartment complex in Ha Noi. The project, involving an investment of VND1.5 trillion (nearly $69 million), consists of four buildings with more than 600 offices and apartments which are expected to go on sale in 2016.

Speaking during a meeting with investors on Thursday, Hoa Phat Group Chairman Tran Dinh Long said the business results were achieved due to the group's strong financial condition and low total debt-to-asset ratio of 28 per cent.

Asked about the progress of some major projects the firm is investing in, Long said VND3.8 trillion ($174.2 million) would be invested in the third phase in the Hoa Phat integrated steel complex in Hai Duong Province, which would have a capacity of 750,000 tonnes per year. The construction was expected to be completed in September 2015, and the blast furnaces would become operational by the end of this year, he said.

The firm has imported most of its raw materials because the Thach Khe iron ore mine in Ha Tinh Province has not become operational.

"The proportion of imports of ore depends on the Thach Khe iron ore mine. If the mine begins operations, the rate of ore imports will be low; if not, the import ratio will increase to 80 per cent," Long said.

The group has also implemented a plan to develop its cattle feed business. It has invested in a food processing factory in Pho Noi A Industrial Zone with a capacity of 300,000 tonnes per year. The factory is expected to begin operations in the first quarter of 2016. — VNS

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