Ha Tien Cement's net profit halves to VND160bn

Ha Tien Cement JSC’s (Vicem group) net profit halved YoY in the 1H22 to VND160bn (US$6.8m) due to higher fuel and additive costs. The company says prices of key inputs like coal, oil and gypsum increased sharply, pulling down profits. It reported revenues of VND4.34trn (US$184.8m), up 8.5 per cent.

The military conflict between Russia and Ukraine, and the embargo by the West have caused global coal, oil and gas crises. According to the Vietnam National Cement Association, coal accounts for 35-50 per cent of cement production costs. Nearly two thirds of coal have to be imported, and therefore, global coal prices heavily impact Vietnamese cement production costs. 

According to Mirae Assets Securities Vietnam Co, this year Vicem Ha Tien faces threats including soaring input costs, and competition from cement and clinker exporters in the north such as Thanh Thang Group Cement JSC, Nghi Son Cement Corp and Thang Long Cement JSC.

It predicted full-year revenues of some VND9.14trn for the company and profits of VND495bn, both representing a 30 per cent increase from last year. However, BIDV Securities Co forecast revenues of VND9.24trn but places profits of only VND380bn.

In March Vicem Ha Tien increased cement prices by VND100,000/t (US$4.27/t).