BMP’s 2024 annual general meeting was held on the morning of April 29 in District 6. Photo: Tu Kinh
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Results depend on the government’s investment policy
At the 2024 annual general meeting of shareholders held on the morning of April 29, Chairman of the Board of Directors of Binh Minh Plastics JSC (HOSE: BMP) Sakchai Patiparnpreechawud stated that the company faced many challenges last year including competition, geopolitical conflicts, and an unstable real estate market.
“2023 was a successful year but there will be a lot to do in 2024,” the leader said.
Over the past five years, BMP has had strong growth in performance thanks to continuous management and investment in automation. The use of robots has brought great competitive advantages. In addition, the company is the only unit providing heavy metal-free products. This means that BMP‘s products ensure the health of consumers, can be used for many years, and do not leak. BMP is continuing to conduct research and development to launch new products to meet diverse demands.
BMP’s business results in the first quarter of 2024 declined by about 30% year-on-year in both revenue and net profit. According to the Chairman, the Tet holiday period had a negative effect on the company’s revenue and he believes that the upcoming period will be more positive when the real estate and construction markets improve.
| Revenue and net profit of BMP by quarter from 2019 to the present |
However, this year’s growth will not be significant and will depend on government policies, such as prioritizing strong investment in infrastructure. Currently, although this has not really taken off in the first half of 2024, it is expected that the second half of the year will be better, when companies like BMP will benefit. This quarter, the company has also had plans to make up for losses in order to achieve good results.
Regarding the decline in BMP‘s market share in the first quarter compared to some competitors, the leader said that companies identify different key segments. BMP is strong in the southern region and identifies real estate as its key segment. There are companies that identify the key segment as being in construction projects, so demand may not be affected much.
Raw material prices expected to be stable in 2024
The Thai Chairman predicted that the PVC market in the second half of the year will continue like the first quarter, with prices possibly increasing or decreasing slightly, but remaining stable. Accordingly, the EBITDA margin (profit before tax, interest, and depreciation) will remain at the current level, and if the price of crude oil increases sharply, that will be a factor beyond control.
“Last year this profit margin was quite good and achieving the same level this year will be a success,” he said, adding that if PVC prices remain stable at this level, the entire supply chain will not be affected. If input prices increase, output prices will have to be adjusted. As for exchange rates, this will not be a major concern.
Currently, BMP is discussing and has not made any decisions regarding a plan to invest through mergers and acquisitions. The company believes that supplying products to the agricultural sector will have a lot of potential in the future.
The plastics company will continue its policy of organizing annual customer conferences for tier 1 distributors, as well as every two years for tier 2 distributors in order to build strong relationships between the parties. However, this policy is not part of the commitment between the company and its customers, so the organization will depend on actual conditions.
Parent company director elected to the Board of Directors
In 2024, BMP sets a revenue target of VND5.5 trillion, a slight increase of nearly 6% compared to 2023. The after-tax profit target is VND1 trillion, remaining unchanged. The company plans to invest VND141 billion and expects to pay a dividend of at least 50% of after-tax profit. The remuneration for the Board of Directors and the Supervisory Board will be VND4.4 billion and VND1.1 billion, respectively.
At the end of last year, BMP moved its factory from Ho Chi Minh City to Long An. Therefore, capital expenditure in 2024 will increase significantly to support automation at the new factory.
At the general meeting, BMP approved the resignation of Poramate Larnroongroj from the Board of Directors. At the same time, Krit Bunnag (born in 1975) was elected to the Board of Directors. Mr. Bunnag is the Director of Nawaplastic Industries Co., Ltd. (NPI) (a major shareholder, owning 54.99%). He does not currently hold any position at BMP.
Responding to concerns about the recent high employee turnover, which could lead to the disclosure of business secrets, the leader of BMP said that this is a normal occurrence and that the company’s human resource policies are very good in both the short and long term. According to Mr. Sakchai, it is certainly not possible to guarantee that information will not be disclosed, but BMP currently has very good information protection policies, so he believes that this will continue to be ensured.
Binh Minh Plastics reports a 32% decrease in first-quarter profit
