Industrial parks forecast lower profits due to pandemic

Update: April, 13/2020 - 16:56


The Đồng Nai-based Industrial Urban Development JSC No 2 (D2D) expects post-tax profits in 2020 to slump by 51.5 per cent year-on-year to VNĐ178.7 billion (US$7.7 million). — Photo

HÀ NỘI — Industrial park owners are forecasting a drop in 2020 profits, blaming the ongoing damage inflicted by the novel coronavirus outbreak.

The Đồng Nai-based Industrial Urban Development JSC No 2 (D2D) expects post-tax profit to slump by 51.5 per cent year-on-year to VNĐ178.7 billion (US$7.7 million).

D2D also estimates that revenue this year will fall by 49 per cent to VNĐ414 billion.

In 2019, D2D recorded net revenue of VNĐ763 billion and post-tax profit of VNĐ368.5 billion, 2.7 and 4 times higher than in 2018, respectively.

The company attributed the sudden slump to the investment efficiency of the Lộc An KDC project in Long Thành District.

Sonadezi Long Thành Holding Company (SZL), also in Đồng Nai, has revised its revenue target in 2020 to VNĐ409 billion, down 4 per cent year-on-year, and post-tax profit of VNĐ87 billion, down 16 per cent compared to 2019.

Sonadezi Long Thành has authorised its board of directors to adjust its business plans to match the complicated developments of COVID-19. However, shareholders will need to be advised if the targets fall by more than 30 per cent.

Tín Nghĩa Industrial Park Development JSC (TIP) expects its revenue to reach VNĐ166 billion, down 24 per cent against 2019, and pre-tax profit to touch VNĐ93 billion, down 19 per cent year-on-year.

TIP said this year the company will face difficulties regarding slow and complicated administrative procedures, higher costs for compensation and site clearance, and less FDI due to COVID-19.

SONADEZI Châu Đức Shareholding Company (SZC) has also forecast post-tax profit of VNĐ115 billion, down 14 per cent.

The COVID-19 pandemic is becoming increasingly complicated, SZC’s Board of Directors said, and that the company's investment attraction will be negatively affected.

In 2020, revenue from industrial land leasing, factory leasing, management fees and industrial infrastructure services is estimated at VNĐ282 billion. The company is also continuing the construction of the Châu Đức Urban Industrial Park and Golf Course.

Higher profit

Among the industrial park operators suffering the severe impacts of the pandemic, some still expect a higher profit in 2020.

Phước Hòa Rubber JSC (PHR) has forecast total revenue of VNĐ2.46 trillion, an increase of 52 per cent, and pre-tax profit of VNĐ1.15 trillion, double the figure in 2019.

The board of directors at PHR said it would respond to each specific scenario during the COVID-19 pandemic.

The company will also restructure projects it has invested in, including Trường Phát Rubber JSC and Phước Hòa Kampong Thom Rubber Development Co Ltd.

According to Việt Dragon Securities Co, PHR's industrial parks were located in the most favourable locations in Bình Dương Province so rental rates are expected to remain high, at around US$60-80 per metre square in Tân Bình and $90 per metre square in Nam Tân Uyên.

Rental demand is expected to continue to increase as FDI in Việt Nam, and in particular Bình Dương Province, is still rising, making the industrial zone segment a key driver for PHR.

However, these comments were made by VDSC before the COVID-19 pandemic.

Vĩnh Phúc Infrastructure Development (IDV) aims to earn VNĐ264 billion in revenue, and VNĐ151.6 billion in post-tax profit, up 62 per cent and 54 per cent, respectively, compared to 2019.

Remarkably, thanks to the large profit made by its subsidiary VPID Hà Nam, IDV's revenue and profit in Q1 reached VNĐ109 billion and VNĐ60.6 billion, respectively.

These earnings in Q1 fulfilled nearly half of the target set for 2020.

This year, IDV plans to increase investment attraction at the Châu Sơn Industrial Park, and focus on expanding the Khai Quang Industrial Park and developing new industrial park projects. — VNS