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 mainly attributed to robust revenue growth, improved profit margins (up from 11% to 13%), and a reduction in financial expenses.
The steel division remains the largest contributor, accounting for 96% of the Group’s revenue and 91% of its consolidated after-tax profit. Agriculture follows closely, contributing 4% to revenue and 7% to after-tax profit. Real estate comes in third, with a 0.3% revenue share and a 2% contribution to after-tax profit.
In the real estate sector, Hòa Phát is expanding its existing industrial parks in Hưng Yên and Hà Nam provinces, developing additional land and technical infrastructure to cater to the needs of domestic and foreign businesses looking to invest in the country.
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 sales showed a 10% decline, falling from 805,000 tons to 724,000 tons. Hòa Phát maintains its leading position in the domestic construction steel market 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 and export sales.
For the first six months of the year, Hòa Phát recorded a revenue of 71,029 billion VND and an after-tax profit of 6,189 billion VND.
The HRC Division 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. This has created significant competition for Hòa Phát’s HRC steel sales in the domestic market.
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 construction steel sales as a key driver of its revenue increase this quarter, offsetting the decline in HRC sales.
In terms of downstream steel products, Hòa Phát’s pipe output remained steady at 318,000 tons, similar to the first six months of 2023. Hòa Phát’s steel sheet production reached 222,000 tons, and the company supplied over 69,000 tons of various types of prestressed steel (PC Bar, PC Strand, PC Wire) to the market.
The Dung Quất 2 Project Reaches 80% Completion in Phase 1
The Group is focused on the construction of the Hòa Phát Dung Quất 2 Integrated Steel Complex, with an annual capacity of 5.6 million tons of hot-rolled coils. Currently, the project has reached 80% completion in Phase 1 and 50% in Phase 2. The first products from Phase 1 are expected to be launched by the end of 2024. Upon the completion of the Dung Quất 2 project, Hòa Phát’s crude steel production capacity will exceed 14 million tons per year, ranking it among the Top 30 largest steel companies in the world.
