Hòa Phát Group’s latest financial report shows impressive results, with a 34% year-on-year rise in net revenue to 39,556 billion VND. Net profit surged to 3,320 billion VND, marking a significant 127% increase compared to the previous year.
This positive performance is largely attributed to robust revenue growth, improved profit margins (up from 11% to 13%), and a reduction in financial expenses.
The steel division remains the Group’s mainstay, contributing 96% and 91% to the consolidated revenue and net profit, respectively. Agriculture follows closely, accounting for 4% of revenue and 7% of net profit. Real estate comes in third, with a 0.3% contribution to revenue and a 2% share in net profit.
In the real estate sector, Hòa Phát is expanding its existing industrial parks in Hưng Yên and Hà Nam provinces, developing clean land funds, and enhancing technical infrastructure to cater to the business and investment needs of domestic and foreign enterprises.
Hòa Phát’s Q2 Business Results
Unit: Billion VND
Source: VietstockFinance
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Construction steel output for Q2 reached 1.27 million tons, a 33% increase from the previous quarter (956,000 tons). In contrast, hot-rolled coil (HRC) steel consumption witnessed a 10% dip, falling from 805,000 tons to 724,000 tons. Hòa Phát retains its domestic market leadership in construction steel with a 38% market share.
The decrease in HRC steel output in Q2/2024, compared to Q1/2024, is attributed to challenges in both domestic consumption and exports.
For the first six months of the year, Hòa Phát recorded a revenue of 71,029 billion VND and a net profit of 6,189 billion VND.
The HRC Segment Faces Challenges from Cheap Imports
Hòa Phát’s report also highlights the influx of low-priced HRC steel into the Vietnamese market in the first half of 2024. Imports of HRC steel reached 6 million tons during this period, a 50% increase compared to the same period in 2023, outpacing the overall market growth rate. This has created significant pressure on Hòa Phát’s domestic HRC steel consumption.
Additionally, HRC steel prices in Vietnam, after a brief uptick in February 2024, have been on a downward trend from March through the end of Q2/2024. The export market also presents challenges due to the global surplus of hot-rolled coils and the increasing trade protectionism in importing countries.
Hòa Phát attributes the growth in revenue this quarter to the strong performance of its construction steel business, which has offset the decline in HRC sales.
Regarding downstream steel products, pipe output reached 318,000 tons, on par with the first six months of 2023. Hòa Phát’s steel sheet production stood at 222,000 tons, while the company supplied over 69,000 tons of various types of prestressed steel (PC Bar, PC Strand, PC Wire) to the market.
The Dung Quat 2 Project Reaches 80% Completion in Phase 1
The Group is focused on executing the construction of the Dung Quat 2 Integrated Steel Production Complex project, with an annual capacity of 5.6 million tons of hot-rolled coils. Currently, the project has achieved 80% completion in Phase 1 and 50% in Phase 2. The first products from Phase 1 are expected to hit the market by the end of 2024. Upon the completion of the Dung Quat 2 project, Hòa Phát’s crude steel production capacity will surpass 14 million tons per year, placing it among the Top 30 largest steel companies in the world.
