Higher prices due
to a recovery in China and good inventory and cost management saw the steel
industry put up an improved performance in the first quarter.
The
consolidated revenues of Hoa Phat Group, the company with a third of the
construction steel market share, increased by only 3% but it managed to reverse
its two-quarter losing streak with profits of VND380 billion (US$16.2 million).
Steel accounted for 94% of the profit.
Vietnam Steel
Corporation turned around to make a profit of VND70 billion after three
quarters of losses, while Hoa Sen Group reported a profit of VND250 billion
after two quarters of losses. The latter’s management had forecast profits of
VND50 billion.
Profits
improved mostly due to companies’ internal management initiatives.
Hoa Phat said
demand did not recover in Q1, and its positive results were due to effective
inventory and materials management, and flexible sales strategies.
Hoa Sen said
it managed its costs well, reducing them by 40% year-on-year.
According to
the Vietnam Steel Association, finished steel sales fell by 25% year-on-year to
six million tons while production dropped by 21% to 6.6 million tons.
But prices
rose in the first quarter, tracking Chinese prices, which rose for three
straight months since the
start of this year.