Economics

Big winners, losers

According to information from the Ministry of Agriculture and Rural Development, in 2022, the rice industry set a record with an export output of 7.11 million tons, bringing in a value of US$3.46 billion, up 13.8% in volume and 5.1% in value over the previous year.

Besides, Vietnam’s rice exports have many advantages from the beginning of 2022 when the traditional customer, the Philippines, increases imports. The Chinese market also shifted from importing small quantities of rice from Vietnam in the first months of the year to large orders in the last months of the year. Meanwhile, some European countries tend to increase rice imports to replace the declining supply of wheat due to the protracted Russia-Ukraine war.

From the positive signals from the market, in general, in the fourth quarter of 2022, all rice businesses brought in an increase in revenue compared to the same period last year, only Loc Troi Group with a decrease in revenue. mild 1.54%. Accordingly, the revenue of PAN Group increased by 9.4%, Trung An Rice increased by 35%, Vinafood II increased by 57%, Import-Export of An Giang Agricultural products increased by 152%.

Although An Giang Import-Export ranks first in revenue growth, PAN Group is the enterprise holding the highest revenue with 3,906 billion VND, followed by Loc Troi Group with 3,062 billion VND.

In terms of profit scale, although the PAN Group still holds the top position with a profit of 243 billion dong after tax, this is a backward figure compared to the same period last year. In contrast, Loc Troi Group recorded a higher growth rate of 33%, reaching VND 208 billion.

Race track of two big rice industry

According to the newly released financial report, Loc Troi Group Joint Stock Company (UPCoM: LTG) of businessman Huynh Van Thon had net revenue of VND 3,062 billion, down 1.54% over the same period.

However, because the cost of goods sold in the quarter recorded a decrease of 4.7% to only VND 2,329 billion, the gross profit of Loc Troi remained at VND 732 billion, equivalent to an increase of 10% compared to the same period last year. .

After deducting expenses, Loc Troi Group reports a profit VND 208 billion, up 33% compared with the same quarter of 2021.

Accumulated in 2022, Loc Troi’s net revenue reached a record of VND 11,690 billion, up 14.3% compared to 2021. In which, revenue from food accounted for the majority with 55%, equivalent to VND 6,430 billion.

Deducting expenses, Loc Troi reported a profit of 412 billion dong, a slight decrease compared to the same period last year. However, this is also a positive signal to help the company complete the profit plan for the whole year.

Regarding the financial situation of the company, as of December 31, 2022, total assets of Loc Troi reached VND 8,728 billion, up 12% compared to the beginning of the year. However, cash and cash equivalents recorded a decrease of more than 55% to only VND 799 billion at the end of 2022. Along with that, the inventory index also decreased slightly to only VND 2,108 billion at the end of the period.

In addition, the outstanding debt of Loc Troi by the end of 2022 is 5,575 billion VND, 15.8% higher than the beginning of the year. Notably, the company currently has a bank loan of VND3,695 billion at 15 banks.

In the opposite direction of both revenue and profit of Loc Troi, PAN Group Joint Stock Company (PAN Group; HoSE: PAN) recorded net revenue of VND3,906 billion, up 9.4% over the same period last year.

Although the quarter recorded an increase in cost of goods sold, PAN Group’s gross profit still increased by 26%, reaching VND 894 billion. In addition, revenue from financial activities in the period reached VND 95.7 billion, 30% lower than the fourth quarter of 2021.

After deducting expenses, PAN Group reported a profit of 243.8 billion dong, down 12% compared to the same period last year.

Accumulated in 2022, PAN recorded revenue of VND 13,662 billion, up 47.7%. After tax, the company reported a profit of VND 774 billion with a growth of 51% compared to 2021. Revenue structure by main business segment for the whole year 2022 – the seafood segment contributes VND 6,300 billion, the agricultural segment contributes VND 4,900 billion, and the food segment contributes VND 2,400 billion.

In 2022, PAN sets a revenue plan of VND 14,300 billion, profit after tax of VND 755 billion. Thus, the company has fulfilled the profit target and is close to the revenue plan with 99% of the plan.

In terms of the company’s financial situation, the total assets of the company as of December 31, 2022 was VND 16,054 billion, a slight increase of 3.6% compared to the beginning of the year with short-term assets accounting for 64% of the structure. Notably, in the year, the company made provision for devaluation of securities of nearly 3.2 billion dong, while at the beginning of the year it was only about 1.8 billion dong.

The problem is called the cost of businesses

Besides the positive growth of the two rice giants, other businesses also recorded very positive signals, including Trung An Rice. However, before being happy, this business had to “head up” because costs eroded profits in the last months of the year.

Accordingly, Trung An High-Tech Agriculture Joint Stock Company (HNX: TAR) recorded fourth quarter revenue of 1,575 billion dong, up 35% over the same period. Because the growth rate of COGS was faster than the growth rate of revenue, gross profit in the quarter fell by more than 40% to VND67 billion.

After deducting expenses, the company’s profit after tax was only 18 billion dong, 59% lower than the same period in 2021.

Accumulated in 2022, this rice enterprise recorded good news when it reached the historic revenue milestone after 6 years with 3,798 billion dong, up 22% compared to 2021. However, under pressure from the increase in the cost of goods. sales and expenses “escalated”, Trung An reported a backward profit of 70 billion dong, down 27% compared to 2021.

With the above results, Trung An has completed the revenue target, but has not been able to complete the profit plan for the whole year 2022.

The same fate as Trung An, although the revenue of Joint Stock Company An Giang Agricultural Products Import and Export (Afiex; UPCoM: AFX) increased, but profit after tax still decreased deeply, mainly due to a lack of financial revenue, and high financial, selling and administrative expenses.

Specifically, Afiex achieved revenue of VND622.55 billion in the fourth quarter of 2022, up 152.3% over the same period. Along with the increase in revenue, the expenses in the period of this business also “escalated” dizzy. Accordingly, financial expenses increased by 183% to 10.2 billion dong; selling and administrative expenses reached VND 11.4 billion, up 28%.

After deducting expenses, the company recorded an after-tax profit of VND 1.37 billion, down 92% over the same period.

Accumulated in 2022, Afiex’s revenue is VND 1,612 billion, up 110%. After tax the company reported a profit of 28 billion dong, up 35% over the same period last year.

In 2022, Afiex sets a business plan with a total revenue of 2,194 billion VND and pre-tax profit of 52 billion VND. Thus, by the end of 2022, the company did not complete the previously set target.

Expectations for a breakthrough of the rice industry in 2023

In the agricultural sector outlook update just released, VNDirect Securities expects 2023 to be a favorable year for the rice industry thanks to rising rice prices due to India’s restrictions on rice exports. In the context of reduced supply while demand is stable, world rice and Vietnamese rice exports will still have the potential to increase prices in 2023.

In the view of VNDirect experts, domestic rice exporters will benefit from the increase in rice prices. Vietnam is the world’s third largest rice exporter, after India and Thailand. Indian rice prices are in a weaker competitive position due to higher tariffs, thereby pushing buyers to shift to Thai and Vietnamese rice.

In another development, according to the report “Rice market in 2022” of VietnamBiz, in 2023 rice exports will have many breakthrough opportunities. Specifically, reaching high prices at the end of the crop, especially at the end of 2022, will help rice exporters have an advantage to negotiate contracts in 2023.

In addition to having a good price base, in many markets such as the Philippines, China, Europe or Bangladesh … there are also many prospects. In particular, for the Chinese market, the country’s recent announcement that it will reopen is also said to be a positive signal for rice exporters..

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