Rubber producers aspire rosy profit picture in 2022

Vietnam posted growth in both rubber export volume and value in the first four months of this year

Southern Rubber JSC is set to reach $215.3 million in revenue, up 2 per cent on-year, and $4.39 million in pretax profit, equal to an 83 per cent jump on-year.

Similarly, Phuoc Hoa Rubber JSC (PHR) aims to rake in $97.9 million in revenue and $39 million in pretax profit, up 29 per cent and 58 per cent on-year, respectively.

Bao Viet Securities JSC assessed that Danang Rubber JSC (DRC) could post a 15 per cent hike in its pretax profit this year.

VNDirect Securities JSC estimated that this year, PHR could eye a 156.2 per cent jump in its net profit compared to 2021 thanks to the one-off payment amounting to $39 million from land compensation at the VSIP III project. In the first quarter, PHR has already received more than $12.5 million of the sum.

PHR forecast that the rubber sector has brilliant growth prospects this year as the rubber price in the global market continues to stay high.

The long-term development prospects are also good as the global rubber market is forecast to enter a new price hike cycle due to declining supply sources, providing favourable conditions for Vietnam’s export rubber.

Pham Hong Phu, general director of Casumina, noted that impacts from the Russia-Ukraine conflict and China’s zero-COVID strategy have led to a scarcity of several materials such as black coal and synthetic rubber, but this did not much affect the company’s business.

Casumina had worked on storing rubber serving 2022 production from late last year. In the first four months of this year, the company has gathered enough rubber reserves for production until September.

In addition, as the material price fetches high, the firm announced raising product prices in the domestic and export markets.

Regarding an anticipated sharp rise in its profit this year despite a slight increase in revenue figure, Phu explained that this year, the production cost is not as high as last year.

Elsewhere, DRC this year is set to focus on their advantageous products in the domestic market to boost production and business efficiency such as with tyres. The company aims to fully cover domestic market segments and optimise sales in export markets.

Analysts assumed that in the forthcoming time, Vietnam’s rubber export would cash in on a spike in crude oil price, dwindling supply, plus burgeoning demands in major markets, in which China remains Vietnam’s largest rubber export market.

In the first four months, local firms shipped 485,000 tonnes of rubber, bringing in $857 million in export value, up 4 per cent in volume and 9 per cent in value on-year.