TalkVietnam

Thuong Nam Tam

Investors place orders for stock trading at ACB Securities Company. Nearly 50 listed enterprises have incurred losses in the fi rst quarter of this year – Photo: Le Toan

Around 500 out of 700 enterprises listed on the two local exchanges have released financial statements in the first quarter. Of which, nearly 50 firms have incurred losses while many others have seen their profits tumbling compared to the same period of last year.

Deep losses

The shipping industry has seen three consecutive losing years as revenues fail to match expenditures. Many enterprises have shifted to other sectors while the remaining firms are struggling.

On the Hochiminh Stock Exchange (HOSE), South Vietnam Container Shipping Company (VSG) reported losses in 15 quarters in a row. In this year’s first quarter, the company obtained VND19 billion in revenue, a 23.6% year-on-year decline, due to a decline in ship leasing prices, container loading service and warehouse leasing service.

Today will be the last trading session of VSG on HOSE as its total loss has exceeded its paid-up capital. The enterprise has incurred losses in three years in a row.

Vinaship Company (VNA) incurred a loss of VND28.7 billion in the first quarter, having lost VND28 billion in 2012. According to the company’s statement, the shipping demand turned low in the quarter, eroding its revenue.

Meanwhile, the real estate sector was also in the same plight.

Vung Tau Real Estate and Construction Company (VRC), for instance, suffered losses for the fourth straight quarter. Between January and March, the enterprise lost over VND670 million despite a strong cut in expenditures.

Song Da 9.06 Company (S96) also lost over VND700 million in the first quarter after posting losses in two consecutive years. The Hanoi Stock Exchange has put S96 into the watch list due to it poor operations.

Other loss-making enterprises in this sector included PV2 Investment Company (PV2) and Hoang Long Group (HLG). Besides, negative impacts of the real estate market also affected building material and cement companies.

Ha Tien Cement Company No. 1 (HT1) obtained over VND1.1 trillion in revenues, down 9% year-on-year, while Bim Son Cement Company (BCC) saw its profit dropping 22% to nearly VND183 billion.

BCC in its financial statement explained that financial, sale and corporate management costs rose 22%, 121% and 22% compared to the same period of last year respectively.

Vicem Hoang Mai Company (HOM) lost nearly VND11 billion in the first quarter. Its revenue fell 5.2% to nearly VND352 billion while cost rose 6%.

Local cement enterprises are facing huge challenges as supply has far outpaced demand. The Government has just given nod to the Ministry of Construction’s proposal to eliminate nine cement plant projects with capacity of less than 2,500 tons a day out of the cement industry development planning.

Shrinking profits

In the banking sector, profits of many banks tumbled against the previous year. Eximbank (EIB) attained around VND500 billion in pre-tax profit, a sharp decline compared to last year’s figure of over VND1 trillion.

Asia Commercial Bank (ACB) obtained over VND300 billion while it gained VND1.1 trillion in 2012. Vietcombank (VCB) also saw its profit dropping by 15% year-on-year.

Small gains for consumer stocks

Many listed enterprises in the consumer goods sector have posted up gains in the first quarter of this year but high expenditures on advertising, marketing and promotion have deeply cut into their profits.

Vietnam Dairy Products Company (VNM) attained over VND1.5 trillion in after-tax profits, up 21% against the previous year. However, the company had to spend more on sale and corporate management costs.

Net Detergent Company (NET) gained over VND15 billion in after-tax profits, up 4% year-on-year, although its revenues shot up by 18%. The reason was that its sale expenses surged over 50% while product cost rose 14%.

Lix Detergent Company (LIX) saw its profit jumping 77% to VND19.7 billion in the first quarter. The figure should have been higher if the company’s financial and sale costs had not increased.

Lam Van Kiet, general director of the company, said that sale cost increased VND4.8 billion and corporate management cost rose VND1.6 billion in the first quarter. However, the company still made gains due to higher revenue and lower input costs.