(HSV VIETNAM GROUP) – Hoa Phat's steel sales volume has continuously increased from April to present, contributing to the recovery of this enterprise's business results.
Hoa Phat Group (stock code HPG) has just announced its production and business situation in October 2023, with production output reaching 619,000 tons, down 3% compared to the previous month.
Sales output of products such as hot rolled steel coils (HRC), construction steel, and steel billets reached 635,000 tons, an increase of 7% compared to September and this is the highest level this enterprise has achieved since June 2022. Of which, HRC recorded over 273,000 tons, an increase of 17%.
According to information from Hoa Phat, hot rolled steel coil sales results last month were high mainly thanks to better demand for downstream products in the southern market and exports compared to September 2023. Most clearly, Hoa Phat's HRC downstream products in October such as steel pipes and galvanized steel also increased by 11% and 25% respectively compared to the previous month. Specifically, Hoa Phat steel pipes reached 54,000 tons, Hoa Phat corrugated iron recorded 26,000 tons.
With construction steel products and high quality steel, Hoa Phat Group supplied 339,000 tons to the market, down 4% compared to September. Of which, export output contributed 110,000 tons, up 23%. For the first time in many months, Hoa Phat has orders to export steel billets to the international market.
In the cumulative 10 months, Hoa Phat Group produced 5.43 million tons of crude steel, down 18% over the same period in 2022. Sales of HRC products, construction steel, high quality steel, and steel billet reached 5.25 million tons, down 15% over the same period.
HPG's sales output has continuously improved in recent months. This, along with cooling input raw material prices, helped bring positive business results for the company in the third quarter.
Specifically, the business brought in 28,484 billion in net revenue, down 16% over the same period last year. Profit after tax is 2,000 billion VND, much better than the loss of 1,786 billion VND in the first 9 months of 2022. Accumulated for 9 months, Hoa Phat reached 84,569 billion in net revenue, profit after tax is 3,831 billion VND; decreased by 27% and 63% respectively over the same period.
In the recent HPG outlook report, SSI estimated that HPG's construction steel consumption volume in 2023 will reach 3.6 million tons, down 15.9% over the same period last year; HRC output reached 2.7 million tons, up 2.9%. The average assumed selling price of construction steel and HRC steel decreased by 9.5% and 18% over the same period, respectively; compared to a 3% and 33% decline in iron ore and metallurgical coal input prices.
With such output and selling price, SSI lowered HPG's net profit forecast in 2023 from VND 7,030 billion to VND 5,950 billion, down 29.9% over the same period last year.
Forecasting for 2024, SSI expects HPG's construction steel consumption volume to increase by 12% compared to 2023, when the real estate market will gradually recover and disbursement into infrastructure investment remains stable. Operating capacity is expected to improve to 83.6% in 2024 (from 75.4% in 2023).
With the expectation that the company's gross profit margin will improve to 14.7% (from 11.4% in 2023), SSI forecasts that HPG's 2024 net profit will increase sharply by 81% compared to 2023, reaching VND 10,780 billion.
Ha Diem HSV