Profitable Businesses Exercise Caution
Many oil and gas companies have reported successful business operations in 2023. One notable example is Binh Son Refining and Petrochemical Company (BSR) with a consolidated revenue of VND 14,423 billion, pre-tax profit of VND 9,848 billion, and net profit of VND 8,455 billion, which doubled the adjusted net profit target (VND 4,900 billion).
After a profitable year in 2023, BSR’s production targets for 2024 include a production volume of over 5.7 million tons, consumption volume of over 5.66 million tons, total consolidated revenue of VND 94,974 billion, and pre-tax profit of VND 991.3 billion. These targets were set based on a crude oil price of USD 70 per barrel.
While these targets are cautious, it should be noted that BSR has often exceeded its set targets in recent years.
Binh Son Refining and Petrochemical Company has consistently exceeded its business targets in recent years.
Another oil and gas company, Vietnam Oil and Gas Technical Services Corporation – PTSC (code PVS), has set its targets for 2024 with a consolidated revenue of VND 15,500 billion and net profit of VND 660 billion.
This year, PTSC aims to focus on the safe and efficient management and exploitation of its specialized service fleet, ensuring maximum response to domestic market demands and expanding into foreign markets (Malaysia, Middle East, India). PTSC also plans to maintain and expand its labor supply service market for oil and gas exploitation and other O&M services, both domestically and internationally, as well as explore investment opportunities to expand into the LNG storage field.
PVS is also pursuing several offshore renewable energy construction projects inside and outside Vietnam, aiming for efficient, safe, and timely deployment of the Hai Long, Thi Vai LPG Tank, and projects in the waters of Qatar.
Similarly, some fertilizer companies have planned their business operations for 2024, strongly influenced by the global market.
Petrochemical and Power Fertilizer Joint Stock Company (DCM code) recorded a gross revenue of VND 12,600 billion in 2023, a 21% decrease, and a net profit of VND 1,100 billion, 74% lower than the previous year. Although the company achieved 94% of its revenue target and over 80% of its after-tax profit target set in the 2023 Annual General Meeting of Shareholders, the results have declined. However, considering the high profit level in 2022 due to the global commodity boom, DCM has adjusted its 2024 targets to a consolidated revenue of VND 11,878 billion, an 11.7% decrease from the 2023 target, and a net profit of VND 794.8 billion, a 42% decrease from the previous year’s target.
Meanwhile, Petrovietnam Fertilizer and Chemicals Corporation (DPM code) has announced its 2024 business plan with a revenue target of VND 12,755 billion, a 6% decrease from the adjusted 2023 target, and a net profit of VND 542 billion, a 17% increase from the adjusted 2023 target.
These targets are considered cautious as global urea prices are forecasted to gradually recover in 2024 if Russia and China continue to restrict fertilizer exports, benefiting this company.
Ambitious Businesses Striving for Breakthroughs
While businesses with favorable operations set cautious targets, some struggling companies remain ambitious in their plans. Dabaco Group Joint Stock Company (DBC code), led by Chairman Nguyen Nhu So, is an example of such a company.
Chairman So previously mentioned that 2023 was an extremely challenging year for the company, even the most difficult year personally in his nearly 28 years of business management. Decreased purchasing power and low pork prices resulted in the company not achieving its business plan.
Pork prices hit a bottom of VND 48,800/kg in 2023, and the prices of some imported key ingredients for animal feed constantly fluctuated. Additionally, the complex situation of livestock diseases in the country posed further challenges for companies in the livestock industry.
In 2023, Dabaco’s net revenue reached VND 11,110 billion, a 4% decrease compared to the same period, with a net profit of VND 25 billion.
Reflecting on the past challenges, Dabaco is confident in its 2024 plan to achieve a total revenue of VND 25,380 billion and a net profit of nearly VND 730 billion. This plan is based on the assumption of pork prices around VND 53,000 – 55,000/kg, which is lower than Chairman So’s outlook of pork prices in 2024 being unlikely to fall below VND 60,000/kg.
The steel industry has not yet overcome the crisis in 2023, with many companies reporting losses. A noteworthy example is SMC Trading Investment Joint Stock Company (SMC code), which recorded a gross revenue of nearly VND 13,800 billion, a 41% decrease compared to the same period, and a net loss of nearly VND 880 billion, mostly due to provisions for bad debts (over VND 500 billion).
For a company with a high proportion of steel trading such as SMC (around 40%), the stagnant construction sector and unresolved debts have heavily impacted its business operations. The steel production and processing sectors have also faced challenges with limited prospects.
In 2024, SMC has set a business plan with expected consumption volume of 900,000 tons of various steel types and a net profit of VND 80 billion.
The Gioi Di Dong sets a net profit target in 2024 14 times higher than the 2023 achievement.
Another ambitious company is Mobile World Investment Corporation (MWG code) with a target revenue of VND 125,000 billion and a net profit of VND 2,400 billion in 2024, representing a 5% increase and 14 times the 2023 achievement, respectively.
In 2023, MWG set a revenue target of VND 135,000 billion and a net profit target of VND 4,200 billion. Thus, MWG achieved 88% of the revenue target and only 4% of the net profit target set.
