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In contrast to last year, 2024 has started on a warmer note for the global market, and the wood industry is witnessing positive signals. According to statistics from the General Department of Customs, the export of wood and wooden products is one of the six sectors with the highest export value in the first four months, reaching US$4.9 billion, a 25% increase (equivalent to an increase of US$979 million) compared to the same period last year, and far exceeding the overall export growth.
The United States remains the largest export market for Vietnam’s wood and wooden products, with a value of US$2.7 billion, a nearly 32% increase (equivalent to an increase of US$643 million) and accounting for 54% of the country’s total export value of this commodity group.
This positive development has supported wood industry enterprises to report favorable financial results for the first quarter of 2024, showing significant improvement compared to the same period last year.
Data from VietstockFinance shows that out of 15 wood and wooden product companies listed on the stock exchanges (HOSE, HNX, UPCoM) that have announced their first-quarter 2024 financial results, nine companies reported higher profits, four reported lower profits, and two continued to incur losses.
The total revenue of these enterprises reached nearly VND4,100 billion, a slight decrease of 2% compared to the same period in 2023, while net profit increased sharply by 46%, to over VND313 billion.
Adding more bright colors
In terms of absolute numbers, Phu Tai (PTB) topped the first-quarter revenue, reaching nearly VND903 billion from the sale of wooden products, accounting for 64% of its total revenue and a more than 22% increase compared to the same period last year, thanks to increased wood consumption. The gross profit margin for this segment decreased by 0.5 percentage points to 20.6%.
Profit from financial activities increased by more than VND20 billion, helping PTB’s net profit reach over VND89 billion, a 42% increase and the highest profit in the last three quarters since the third quarter of 2023.
Wood An Cuong (ACG) led the industry in profit growth in the first quarter with a 124% increase, earning more than VND81 billion. The company stated that it promoted product lines with good profit margins while implementing solutions to optimize production activities, increase productivity, and reduce costs.
Sharing at the 2024 Annual General Meeting of Shareholders, Mr. Le Duc Nghia, Chairman of the Board of Directors of ACG, said that the company has had export orders until November, as the US market has recovered. He predicted that the company’s export situation in 2025 and 2026 would be more positive.
“Currently, An Cuong’s factories are basically operating at 70% capacity, while the export factory is operating at more than 110% capacity, and the company even has to outsource some production,” added Mr. Nghia.
Vinafor’s achievement was the highest profit in the last six quarters since the fourth quarter of 2022 and was also the first-quarter profit champion with nearly VND117 billion, up 16%.
| Vinafor’s net profit in 2022-2024 |
Vinafor attributed the profit increase to the improved profits of some of its invested companies compared to the same period and the reduction in operating costs, as well as the non-implementation of some planned expenses.
In terms of main business segments, revenue from the sale of wood raw materials and finished products reached nearly VND228 billion, accounting for 65% of total revenue but 31% lower than the same period. The gross profit margin for this segment improved by 2 percentage points to nearly 9%, helping to expand the company’s overall gross profit margin to 18.5%.
Wood Processing Duc Thanh (GDT) achieved a gross profit margin of 32.6%, compared to 26.6% in the first quarter of 2023. As a result, its net profit reached over VND9.5 billion, a 26% increase.
GDT stated that the company did not reduce selling prices this year, and by consolidating two factories into one, it was able to reduce management, personnel, transportation, and other costs. In addition, the company also earned profit from leasing the vacated factory space.
According to Ms. Le Hai Lieu, Chairwoman of the Board of Directors of GDT, at the 2024 Annual General Meeting of Shareholders, as of now, the company’s orders are full until the end of August. If in the past, Duc Thanh Wood accepted all orders, now it is time to be more selective and only take orders with good profit margins and high profitability.
Interspersing gray shades
The case of Truong Thanh Wood Industry Corporation (TTF) is less positive, with a 2% decrease in revenue from its core business to over VND323 billion. The gross profit margin also decreased by nearly 9 percentage points to 13.1%.
However, thanks to the Vietnam Development Bank (VDB) – Buon Ma Thuot Branch’s cancellation of interest-related debts on overdue interest payments, the company was able to reverse financial expenses. Finally, TTF’s net profit reached over VND4 billion, a 63% increase.
Previously, Truong Thanh Wood had a negative 2023 business year, turning from a reported net profit of VND11 billion to a loss of VND134 billion after the audit, bringing the accumulated loss to over VND3,230 billion, and reducing it to over VND3,226 billion at the end of the first quarter of 2024.
MDF VRG – Quang Tri (MDF) and Nam Hoa Production and Trading (NHT) were negative highlights in the first quarter, continuing to incur losses of nearly VND11 billion and VND2 billion, respectively. In particular, MDF marked its third consecutive quarterly loss, with accumulated losses of over VND34 billion by the end of the first quarter of 2024.
| MDF continues to incur losses for the third consecutive quarter |
Pisico Binh Dinh Corporation (PIS), Nam Viet (Navifico, NAV), and Thuan An Wood Processing (GTA) witnessed profit declines of 20-50%, with profits ranging from VND2-3 billion. In particular, NAV recorded its lowest quarterly profit in 20 quarters since the second quarter of 2019, while GTA’s profit was the lowest in five quarters since the first quarter of 2023.
| Navifico’s profit is the lowest in 20 quarters |
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Are wood industry stocks still lackluster? The recovery in orders in the first months of the year has brought optimism to the overall picture, but the performance of wood industry stocks on the exchanges has been “dull.” Since the beginning of the year, 11 out of 15 codes have underperformed the VN-Index’s average growth of 12%; MDF, GTA, and XHC were the most negative, falling by 11-26%. More disappointingly, three stock codes, TTF, PIS, and TLD, are currently on the warning list. These enterprises have submitted explanations and plans to overcome the situation. The stocks of ACG, SAV, PTB, and GDT were the few bright spots in the industry, with price increases ranging from 14-28% compared to the beginning of the year. Notably, PTB’s market price is currently trading around VND72,000 per share, up more than 125% from its low in mid-November 2022, and is at its highest level in the last two years. GDT’s achievement is its highest price in the last eight months, trading at around VND29,000 per share. |
The Manh
