By the end of the third quarter, many steel enterprises reported large losses or decreased business results over the same period. The main cause is mainly the impact of trade wars, high cost of inventories, and large costs. Simultaneously, consumption output tends to decrease.
Dana Steel Italy losses the fourth quarter in a row
The steel company with the most stories in 2019 is probably Italian Dana Steel (stock code DNY). Being a medium enterprise in the steel industry enterprises on the floor with regular business results in previous years without big profits, and rarely with deep losses.
However, after "sticking" to the incident affecting the environment, causing people around the protest area, businesses were temporarily suspended production, selling only unsold goods, selling raw materials and liquidating, returning some equipment. equipment and supplies with short shelf life. By the end of the third quarter of 2019 Dana Steel Italy has halted production for 12 months, corresponding to 4 consecutive quarters of losses with a total loss of more than VND 320 billion in the last 4 quarters. The total loss of the first 9 months of 2019 was over VND 262 billion.
Italian Dana Steel also said that the city had a policy of relocating part of its production activities to Hoa Khanh Industrial Park. In addition, in June, Dana Italian Steel officially filed a lawsuit against the People's Committee and Chairman of Da Nang City related to the losses that this unit suffered from the decision of the City, with the total damage. Estimated VND 400 billion.
Pomina steel has a record loss of 119 billion dong
Pomina Steel (POM) has no special story, but has suffered a loss for the third quarter in a row since the beginning of the year, with a record loss of nearly VND 119 billion in the third quarter, bringing the total loss of the first 9 months of 2019 to over VND 250 billion. . 9 months revenue also dropped by over 9% to 9.151 billion dong.
The reason for the decrease in revenue, according to the company's explanation, is that there is a factory stopping production in the company's system due to equipment failures, leading to a decrease in sales volume, and the factory has fixed the problem. , starting production from the beginning of last October.
According to Pomina's financial statements, in addition to the high cost of capital, the burden of interest expenses also contributed to the decline in profit. Total interest expenses in the first 9 months amounted to VND 265 billion, an increase of more than VND 100 billion over the same period. Pomina's total short-term and long-term financial lease loans is more than VND 6,600 billion.
Vietnam Italy Steel has been in business decline since Kyoei Steel
Referring to Vietnam Italy Steel (VIS), investors remember the deals to rename cult owners since Song Da divested in 2017. Vietnam Italy Steel has recorded record profits when it officially returned to Thai Hung. However, after that, it was a difficult period of business and continued to lose money when the chain of changing names was not over. Japanese enterprise, Kyoei Steel appeared, and only a short time, from a strategic shareholder, Thai Hung gradually changed the name of a stake in Vietnam Italy to Kyoei - a Japanese partner holding dominant position in Vietnam Italy Steel.
Business results, revenue in the first 9 months of 2019 Vietnam Italy Steel decreased 11% over the same period, reaching 3,448 billion. And even the cost of goods was higher than the revenue, making Vietnam Italy Steel recorded a loss of over 141 billion dong in 9 months, bringing the total of undistributed accumulated loss to 467 billion dong. The last 3/2019 Fund is also the 6th consecutive quarter that Vietnam Italy has reported losses.
Enterprises reporting losses in steel industry in the third quarter also include Thong Nhat Sheet Steel (TNS) and Tien Len Steel (TLH), of which Thong Nhat Sheet Steel has made a fifth consecutive loss.
Thai Hung failed to divest his capital, and Tisco's profits plummeted
Also the story regarding divestments. The name Thai Hung appeared in Tisco after SCIC divested. And not long after that, the scenario at Viet Y Steel was repeated when Thai Hung registered to sell most of its shares in Tisco. However, this "game" is not as smooth as it was shown at Viet Italy Steel. The reason was because after Song Da divested, Thai Hung took a controlling stake in Vietnam-Italy Steel, and the handover to Kyoei Steel was favorable. However, Tisco still has a state shareholder - VnSteel with 65% ownership, so Thai Hung has repeatedly sold Tisco shares but failed.
Tisco's business results in Q3 were less than half of the same period with 3.2 billion dong, bringing the first 9 months' profit to 41 billion dong, down by 11% YoY. 9 months revenue also dropped by 7% to 7,652 billion dong.
By the end of the third quarter, total debt of Tisco amounted to VND 8,039 billion, of which short-term debt was VND 5,120 billion, doubling short-term assets. Long-term debt 2,919 billion. If compared with the equity of VND 1,899 billion, the debt is currently 4 times higher than the equity, of which, the total debt is VND 4,976 billion - 2.6 times the equity.
Most steel enterprises have reduced business results
The remaining steel enterprises, though not losing, but most of them have business results plummeted over the same period. In particular, Hoa Phat Steel (HPG) reached VND 15,087 billion in Q3 revenue, up 6% over the same period, while profit after tax reached VND 1,794 billion, down to 25% compared to the third quarter of last year. Another bright spot in the third quarter of Hoa Phat was agriculture, in which the supply of Australian cows, clean chicken eggs, and biosafety pigs reached the top of the country and contributed about 1,840 revenue. billions dong.
Generally in the first 9 months of the year, Hoa Phat Steel produced about 2 million tons, up 16.1% over the same period. Along with that, net revenue also increased by 10% to over VND 45,680 billion. However, the profit after tax was VND 5,655 billion, down 17% compared to the first 9 months' profit.
Enterprises with more "stories" in recent years also have to mention SMC and Nam Kim Steel. Both of these names have always been mentioned recently. SMC announced that it would continue to increase its cooperation relationship with Nam Kim Steel, continuously buying and becoming a major shareholder of NKG. And SMC is expected to increase its ownership in Nam Kim Steel when the AGM resolution has approved the private placement of 30 million shares to SMC. Not only that, the leader of SMC, Mr. Vo Hoang Vu has continuously increased the ownership in Nam Kim and was elected to the Board of Directors, currently holding the position of General Director of Nam Kim Steel.
Regarding business results, SMC's 3rd quarter revenue is approximately equal to the same period, reaching 4,239 billion dong, while COGS increased, profit after tax dropped by 35% to over 35.2 billion dong. In the first 9 months of 2019, SMC's revenue reached 12,904 billion VND, up 6% compared to the same period last year, while profit decreased by nearly half, to 111 billion VND.
Nam Kim Steel is not an exception when the third quarter revenue drops 11.6%, is VND 3,068 billion and the after-tax profit is VND 6.2 billion - much higher than the profit of less than 1 billion. Bronze achieved the third quarter of last year.
Generally for 9 months, Nam Kim Steel reached 8,975 billion dong of revenue, down 20.9% over the same period. The high cost of goods sold led to a profit after tax of only VND 40 billion, a deep decline compared to the profit of more than VND 230 billion achieved in the first 9 months of last year.
Vietnam Steel Corporation (TVN) also experienced the third quarter with both revenue and profit declining over the same period. In detail, Q3 revenue dropped by 7.6% to over 5,700 billion dong and EAT is less than 42 billion dong, down by 71% comparing to 3rd quarter last year.
For the first 9 months of 2019, net revenue reached nearly VND 18,000 billion, down slightly by nearly 2% over the same period. And after-tax profit also dropped by 43% to 445 billion dong.
In the context of the real estate market slowing down, iron ore price is still high, the business results in the third quarter of the steel industry decline are not beyond the expectation of investors.
In addition to reducing costs and increasing sales volume, steel industry enterprises also seek new directions to overcome the difficult period. The combined story like Nam Kim and SMC is an option when businesses are gradually consolidating into a block to increase competitiveness, increase production capacity and consumption.
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