Mixed fortunes for rubber industry

HÀ NỘI — While some rubber firms are aiming high this year, others have had to lower profit targets due to various risks.

According to the Vietnam Rubber Association, rubber materials shortages have recently pushed up latex prices, bringing higher profits to rubber firms.

In the first two months, rubber exports rose by  七. 四 per cent compared to the same period last year, leaving many firms optimistic about the future.

Phước Hòa Rubber JSC announced an after-tax profit target of VNĐ 七 四 四 billion (US$ 三 二. 五 million) for  二0 二 二, up  五 六 per cent year-on-year.

Southern Rubber Industry JSC followed suit with a target of VNĐ 一 三 六 billion, breaking from its regular double-digit profits since  二0 一 七.

Đà Nẵng Rubber JSC spent over VNĐ 九00 billion on production expansion and set its Q 二 profit target  一 一 per cent higher than the previous quarter.

However, some firms are more cautious about making optimistic forecasts, reducing their targets on the grounds of several risks.

Đắk Lắk Rubber JSC expects its pre-tax profits in  二0 二 二 to be  九. 五 per cent lower than last year due to exchange rate uncertainties.

Its subsidiary in Laos, Daklaoruco (DRI), incurred a loss of VNĐ 四0 billion in Q 四/ 二0 二 一 as the Laotian kip fell to the lowest in  一 五 years against the dollar.

Since the world currency market is expected to remain volatile, DRI believes it will not improve its performance year, causing its parent company to adjust its profit target.

Similarly, Tây Ninh Rubber JSC anticipates that its subsidiary in Cambodia will run at a loss of VNĐ 六 二 billion in  二0 二 二.

Accordingly, the company forecasts less profitability in the financial year, at around VNĐ 六 五 billion, down  四 一 per cent against  二0 二 一.

Meanwhile, Đồng Phú Rubber JSC added VNĐ 二00 billion to its profits in Q 四/ 二0 二 一, thanks to the disposal of its rubber trees planted before  一 九 九 九.

However, as the company did not plant new rubber trees between  一 九 九 九 and  二00 二, the number of old trees for sale are expected to fall in the short-term, effectively dragging down its profits.

Additionally, its revenues of VNĐ 三 七 七 billion derived from land compensation in Bắc Đồng Phú Industrial Park will not be recognised this year but in the financial year  二0 二 三.

As a result, the company estimated profits at VNĐ 三 六 一 billion in  二0 二 二, lower than the figure in  二0 二 一 of VNĐ 四 四 九 billion.

Likewise, Tây Ninh Rubber JSC forecast that it will earn VNĐ 七 五 billion in profits this year,  三 三 per cent less than last year.

The Association of Natural Rubber Producing Countries said it sees a bright prospect for rubber industries worldwide in  二0 二 二. 

The association forecast world rubber output would rise by  五. 六 per cent against  二0 二 一.

However, shortages are likely to worsen and last until  二0 三 一 due to the widening gap between supply and demand. — VNS