Mixed profit targets for rubber businesses despite price hikes

HÀ NỘI — Both global synthetic and natural rubber prices are on an upward trend, but not all businesses in the industry are enough confident to set higher profit targets for this year. 

Compared to the beginning of April, the price of this item has increased by  九 per cent. Trading Economics also forecast that the increase in rubber prices will not stop until the end of the first quarter of  二0 二 三 and may reach  三 一0. 八 四 yen per kilo.

The price of crude oil on the world market has increased in recent times, pulling up the price of synthetic rubber – a petroleum product.

The rubber supply was also affected after the Organisation of Petroleum Exporting Countries (OPEC) said that the world would not be able to replace about seven million barrels of oil and other liquids lost per day from Russia.

On April  一 八,  二0 二 二, benchmark US crude oil for June delivery was $ 一 一 三. 二 per barrel and New York's main contract, light sweet crude for delivery in May, was $ 一0 七. 九 三 per barrel.

The price of natural rubber is also supported by world demand in  二0 二 二, which is expected to increase by  一. 二 per cent compared to  二0 二 一, to  一 四. 二 million tonnes.

According to the General Department of Customs, in the first three months of  二0 二 二, rubber exports reached  四0 六, 八00 tonnes, worth $ 七 一 五. 三 九 million, up 0. 三 per cent in volume and  六. 二 per cent in value over the same period of  二0 二 一.

The price trend is likely to increase in the next few months due to the seasonal shortage of supply, according to the forecast of the Việt Nam Rubber Association,

Besides favourable factors from the market, the natural rubber industry is also under certain pressures. The shortage of containers, high transportation costs and slow customs clearance will affect rubber demand.

After a year of failing to complete the annual plan, the Southern Rubber Industry Joint Stock Company (CSM) has set a business plan for  二0 二 二 with strong growth. CSM expects revenue to reach VNĐ 四. 九 五 trillion, a slight increase of  二 per cent over the same period last year, but profit before tax is expected to reach VNĐ 一0 一 billion, up  八 三 per cent compared to  二0 二 一.

To realise the target, CSM managers said that the company will maintain production to meet market demand, including both domestic and exports, at the same time, increase labour productivity for existing product groups, especially investing in small equipment to complete a number of stages in the production line of motorcycle tyres, motorcycle tubes, bias tyres, and auto tubes.

Phước Hòa Rubber Joint Stock Company (PHR) also sets a positive growth target this year with a revenue target of more than VNĐ 二. 二 五 trillion and profit after tax of VNĐ 七 四 四 billion, up  一 六 per cent and  五 六 per cent respectively, compared to  二0 二 一.

Meanwhile, the DakLak Rubber Investment JSC (DRI) targets total revenue of VNĐ 五 九 九. 六 billion in  二0 二 二, a slight increase compared to  二0 二 一, but profit after tax is expected to decrease by  五. 七 per cent to VNĐ 七 九. 二 billion.

DRI Chairman of the Board of Directors Nguyễn Viết Tượng said DRI is managing an area of ​​over  八, 八00 hectares of rubber plantations in Laos with loans mainly in Lao kip. By the end of  二0 二 一, DRI's total debt was more than VNĐ 二 五 六 billion, so the company would be at risk in exchange rates. In case the kip depreciates, DRI's revenue will also be affected. In addition, logistics costs will become high due to the sharp increase in raw material prices, which is also a disadvantage for DRI.

Đà Nẵng Rubber Joint Stock Company (DRC) also forecasts revenue in  二0 二 二 to decrease slightly to VNĐ 四. 四 trillion and profit after tax to decrease by  一 二 per cent to VNĐ 二 五 六 billion compared to the previous year.

DRC said it still faced a labour shortage at some production stages because of the COVID- 一 九 pandemic; empty containers and high rental prices; and high transportation costs which cause the purchase price of raw materials to increase sharply. In particular, the conflict between Russia and Ukraine caused oil prices to rise, pushing up prices of raw materials and goods, and DRC's import and export activities into these two markets were also disrupted.

This year, DRC will focus on products that are the company's strengths in the domestic market to improve production and business efficiency such as off–the-road (OTR) tyres and construction tyres. DRC's goal is to cover all segments in the domestic market as well as increase sales opportunities in export markets.

Positive first quarter

Plenty of rubber companies have recorded positive Q 一 earning results compared to the previous year.

In the first quarter, thanks to a sharp increase in the selling price of finished products compared to  二0 二 一, DakLak Rubber Investment JSC (DRI) recorded net revenue of VNĐ 一 三 四 billion, up  八 per cent, in which, revenue from finished rubber products reached VNĐ 一 三0. 六 billion, the rest was from bananas and cashews.

The company's profit after tax was VNĐ 二0. 八 billion, up  二 七 per cent year-on-year. With the results achieved, DRI has completed  二 二. 三 per cent of the year’s revenue target and  二 六 per cent of the profit target.

Phước Hòa Rubber Joint Stock Company (PHR) said that in the first quarter of this year, the parent company recorded net revenue of VNĐ 三0 二. 六 billion, up  二 五 per cent compared to the same period in  二0 二 一, but profit after tax reached VNĐ 二 四0 billion,  一 一. 三 times higher than the same period last year and completed  三 三 per cent of the yearly plan.

Đà Nẵng Rubber Joint Stock Company (DRC) earned net revenue of VNĐ 一. 二 八 trillion in Q 一, profit before tax of VNĐ 八 一. 七 billion, up  四0. 六 per cent and more than  三 per cent, respectively. Entering the second quarter, the company set a business plan similar to the first quarter, with net revenue of  一. 二 五 trillion, profit before tax reaching VNĐ 八0 billion. — VNS