The second quarter outlook is not very optimistic.
The PHR Board of Directors has approved several production and business targets for the second quarter of 2024, with expected rubber extraction, procurement, processing, and consumption volumes of 1.66 thousand, 1.6 thousand, 3.26 thousand, and over 5.4 thousand tons of dry rubber, respectively. The average selling price is set at VND 40 million per ton, with total rubber sales expected to reach VND 38.6 billion.
As a result, PHR aims to achieve a total revenue of nearly VND 221 billion for the parent company, with rubber business revenue contributing almost VND 217 billion. After deducting expenses, PHR expects to earn a pre-tax profit of over VND 6 billion, with a planned contribution to the state budget of nearly VND 11 billion.
Overall, while the average selling price target is better than the first quarter at VND 38.6 million per ton, the expected volume has decreased, leading to lower expectations for revenue and pre-tax profit in the second quarter compared to the first, a trend that has been observed in recent years.
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Second Quarter 2024 Business Plan for the Parent Company of PHR
Source: Author’s compilation
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Regarding the subsidiaries, the Board has instructed Cao su Truong Phat Joint Stock Company to continue addressing limitations and issues as directed by the parent company’s leadership and to restructure the company according to the guidance provided by the Vietnam Rubber Industry Group (GVR). Tan Binh Industrial Park Joint Stock Company is tasked with rectifying issues identified by the Inspection Team of the Binh Duong Province Construction Department. Cao su and Lam Nghiep Phuoc Hoa – Dak Lak Limited Company is to complete legal procedures to obtain land use rights certificates for their projects. Meanwhile, Cao su Phat Trien Phuoc Hoa – Kamphong Thom Limited Company will focus on efficiently managing the technical process of rubber extraction, maximizing yield, and ensuring the quality of the final product meets standards, striving to exceed the planned production volume for 2024.
A conservative business plan and dividend for 2024
During the meeting, the Board also agreed to present several important agenda items at the upcoming 2024 Annual General Meeting of Shareholders, scheduled for June 28.
The proposed 2024 business plan includes extraction targets of 23.9 thousand tons, comprising 12.4 thousand tons from the company’s own gardens and 11.5 thousand tons from Phuoc Hoa – Kamphong Thom; raw material procurement of 10 tons; and consumption of 33.1 thousand tons, of which Phuoc Hoa – Kamphong Thom accounts for 10.7 thousand tons. The average selling price is expected to be VND 36.4 million per ton, with Phuoc Hoa – Kamphong Thom’s selling price set at VND 34.2 million per ton.
PHR sets ambitious targets for the parent company, aiming for a total revenue of over VND 1,455 billion, a 10% decrease compared to the actual performance in 2023. The company plans to achieve pre-tax and post-tax profits of over VND 277 billion and over VND 245 billion, respectively, representing reductions of 49% and 47% compared to the previous year.
Given the conservative outlook, PHR proposes a minimum cash dividend of 12.35% for 2024, equivalent to over VND 167 billion. For 2023, the company plans to present a dividend ratio of 30%, totaling over VND 406 billion, at the upcoming Annual General Meeting.
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2024 Business Plan for the Parent Company of PHR
Source: Author’s compilation
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The meeting concluded with several other important decisions, including instructing the Board of Directors to oversee the issuance of regulations on bank deposits and loans, and to engage a consultant for the carbon credit initiative at the Cao su and Lam Nghiep Phuoc Hoa – Dak Lak project. The Board also emphasized the need to continue engaging with departments and branches of Binh Duong province to request land-use certificate issuance for households in the Phuoc Hoa Residential Area and other land areas managed by the company. Additionally, they stressed the importance of effectively implementing the digital transformation strategy as directed by the Group for the 2020-2025 period.
The Board of Directors also requested the Board of Directors to report back to the Group on the cooperation and investment plan with the Vietnam-Singapore Industrial Park Company Limited (VSIP3).
Huy Khai
