Textile apparel firms see mixed performance

May 31, 2024 | 11:34
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Amid a rebound in momentum, businesses in the textile and apparel sector have delivered a mixed business picture so far this year.

In April, Thanh Cong Textile Garment Investment Trading JSC (TCG), based in Ho Chi Minh City’s Tan Phu district, raked in nearly $12 million in revenue and more than $907,000 in post-tax profit.

Textile apparel firms see mixed performance

Its revenue was up 13 per cent, while its profit spiked 399 per cent on-year.

TCG’s leadership revealed that as of now the company has clinched about 88 per cent of its order capacity for the second quarter (Q2), and 83 per cent for Q3.

At the company’s 2024 AGM in April, TCG set a target of reaching $154.4 million in full-year revenue, up 12 per cent on-year, and $6.7 million in full-year post-profit, up 21 per cent on-year.

After the first four months, the company had reached 33 per cent of the revenue target and half of its profit target.

Several other units in the sector also eyed inspiring results in the first quarter of this year.

In the group of businesses with revenue surpassing trillions of dong (more than $40 million) per year, Garment 10 Corporation saw the most impressive rebound, with revenue and profit surging 25 per cent and 29 per cent on-year, respectively.

At Song Hong Garment Corporation, in Q1, the company’s revenue picked up nearly 21 per cent to $32 million, and post-tax profit soared 75 per cent on-year to around $2 million.

Bui Viet Quang, the company’s general director, however, said that although the export order intake had rebounded, the price factor had not been as positive, and a complete rebound was more likely in 2025.

“Our company’s 2024 business plan was rooted on safety amid uncertainties in the global market. Foreign partners in the EU and US market still face headwinds, putting pressure on pricing,” said Quang.

In fact, the textile apparel sector witnessed signs of rebound from Q4 last year. The general picture, however, has delivered mixed performances.

Hanoi Textile Garment Corporation saw a 20 per cent drop in revenue, extending its losing streak to eight consecutive quarters.

By the end of March, the company had incurred over $5.6 million in cumulative losses, eating up 66 per cent of its charter capital.

The situation of Garmex Saigon, a unit with nearly half a century behind it, is even more critical.

Besides cumulative losses amounting to $3 million — a fairly high level over its $13.7 million charter capital, the company saw almost ‘empty’ revenue in Q1.

During the period, Garmex Saigon counted just $5,400 in revenue and incurred $487,000 in losses.

The company has temporarily ceased production due to lack of orders.

Its headcount fell from nearly 3,800 labourers in late 2021 to a mere 35 employees in late 2023.

This year, Garmex Saigon aims to reach $2.1 million in revenue, and $6.5 million in other incomes. After deducting expenses, its profit would come to $1.6 million.

To expand income sources, the company has sought permission for fresh lines in its business registration certificates to include retail of drugs and medical devices, wholesale of houseware, transportation, and warehousing.

The textile and apparel sector generated $40.3 billion in export value in 2023 and aims to count $44 billion this year.

However, with difficulties in terms of order intake and challenges from meeting the requirements for greening the sector from export partners, many business leaders plan to step into new fields aligning with the trend for medium- and long-term development.

Apparel groups anticipate ongoing rocky progress Apparel groups anticipate ongoing rocky progress

India and Bangladesh are competing with Vietnam for garment orders, but China is the most formidable rival, while Cambodia and Myanmar are emerging as new exporting nations.

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By Song Thuy

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