Luks Group (Vietnam Holdings) hit by construction standstill in 2H22

Luks Group (Vietnam Holdings) Co Ltd has reported revenue of HKD492.88m (US$62.8m) in 2022, down from HKD513.23m in the previous year. Profit for 2022 came in at HKD48.5m, compared to HKD84.6m in 2021, while earnings per share fell from HKc16.8 to HKc10.6 over the same period. Revenue from sales of cement products stood at HKD281.45m in 2022, marking a contraction from HKD310.3m in 2021. 

According to the company, the fall in cement revenue was due to Vietnam’s real estate and construction sectors coming to a standstill in the second half of 2022. This was driven by rising interest rates, causing a tightening of real estate credit and bond issuance. “The group's cement sales and business were thus seriously affected and resulted into a loss recorded in 2022,” said the company in a statement. 

Looking ahead to 2023, the company still expects various negative factors to impact the first quarter, with operations at the group’s cement plant forecast to “still be difficult”. “However, the market generally believes that the pace of US interest rate hikes will slow down this year, and the coal price has also been dropping from its highest level in 2022. Therefore, it seems to be conducive to the recovery of the real estate market and the construction industry in the second half of 2023, which shall positively support a rebound for the group’s cement plant business,” said the company.