According to An Binh Securities Joint Stock Company (ABS), the results of disbursement of public investment capital in 2023 create important momentum for localities, ministries and branches to continue to disburse at high rates in 2024 - the year of acceleration. to complete the medium-term public investment plan for the period 2021 - 2025.
Based on the 2024 estimate approved by the National Assembly, the Prime Minister issued Decision 1603/2023 on assigning the 2024 state budget capital investment plan with a total amount of 677.349 billion VND, equivalent to 95% of the plan. 2023.
Although the total state budget investment capital in 2024 will decrease slightly compared to 2023, in the context of the world economy still having many difficulties, the international situation is forecast to continue to evolve unpredictably, to achieve the goal of solving the problem. budgeting at least 95% of the assigned public investment capital plan, requiring many drastic solutions from all levels, sectors, localities and investors, experts from ABS acknowledged.
In fact, the determination of ministries, branches and localities is shown in the disbursement of public investment capital in the first months of 2024. According to the Ministry of Finance, the estimated rate of disbursement of public investment capital in the next 2 months The 2024 plan reaches 8,7% of the total plan. Compared to the plan assigned by the Prime Minister, the disbursement rate reached 9,13%, an increase compared to the same period in 2023.
Particularly for key projects, the total public investment capital plan for 2024 allocated in detail by the Ministry of Transport and localities is over 127.593 billion VND.
Many important traffic projects have been constructed throughout the Lunar New Year of Giap Thin with the spirit of "overcoming the sun, overcoming the rain", "construction in three shifts - four crews" to meet and exceed progress.
Therefore, in 2024, domestic cement consumption is expected to grow thanks to public investment and infrastructure projects and the restart of a number of large real estate projects after being cleared but at low levels. difficult to break through. Exports to the Chinese market are unlikely to recover as before, while the growth driver still depends on the Philippines and Bangladesh markets.
Besides, to limit dependence on China, businesses are expanding to markets such as the US, Australia, South America and Africa.
According to Agribank Securities Joint Stock Company (Agriseco), the construction materials group benefits directly right after the site clearance phase, entering project implementation until completing project construction activities.
For the steel industry, businesses that produce and supply steel for public investment projects and transportation infrastructure will benefit from increased demand for steel consumption. For industries where transportation costs have a big impact on a business's ability to sell products, such as cement and construction stone, businesses with a large market share and located near ongoing projects will enjoy benefits. better profits than the rest of the industry.
Especially for the construction stone industry, currently in many public investment projects (North-South expressway phase 2; Bien Hoa - Vung Tau expressway, Long Thanh airport) there is a shortage of land for land leveling. fill. Therefore, Agriseco expects that leading enterprises in the stone industry, owning quarries with large reserves, and located near key projects will benefit.
Regarding the improvement in profit margins of construction material enterprises, for steel enterprises, the price of input materials (iron ore, coke) decreased sharply from the beginning of the year while steel prices and consumption output Steel is expected to recover thanks to public investment disbursement and a thriving real estate market that will help profit margins improve.
For cement businesses, it is expected that business results will still be difficult in 2024, however profit margins will gradually recover from the second half of 2024 above the low base of 2023 thanks to input coal prices forecast to decrease by 24% compared to over the same period (according to World Bank) and consumption output improved slightly. For the construction stone industry, it is expected that construction stone prices will remain high due to lack of supply, which will help stabilize gross profit margin.
Experts say that there are many reasons leading to the decline of the construction materials industry, but one of the main reasons is still the lack of development of the real estate market, or even a sharp decline. However, the impact of real estate on each sector of the construction materials industry is different.
With cement, in addition to being put into constructions and real estate projects, this product can be consumed for projects to build traffic infrastructure, roads, bridges, irrigation, and hydroelectricity; At the same time, partial export is also a temporary solution.
Since the COVID-19 epidemic appeared and then the tension between Russia - Ukraine..., the world economic situation has fluctuated unstable, leading to demand for consumption in general and consumption of construction materials in general. decreased, affecting export activities. Therefore, construction materials businesses cannot expect export to be the salvation.
Output for the construction materials industry is at a standstill. In the current context, experts say that the recovery of the domestic market is of "vital" significance. Besides, focusing on removing difficulties for the real estate market and promoting the disbursement of public investment capital is also an important and indispensable solution.
Some large enterprises in the construction materials industry all have a picture of declining business profits in 2023. The reason given is due to the decline in the real estate market, the construction materials sector also has difficulties in consumption and customers. Customers are more cautious in spending, selling prices decrease...
Hoa Phat Group Joint Stock Company (stock code: HPG) reported business results for the fourth quarter of 2023 reaching 34.925 billion VND, an increase of 33% over the same period in 2023. Profit after tax reached 2.969 billion VND, an increase 249% compared to the same period in 2022 and 48% compared to the previous quarter.
However, cumulatively for the whole year 2023, revenue will reach 120.355 billion VND, down 16% over the same period last year. Profit after tax reached VND 6.800 billion, down 19% compared to 2022, completing 85% of the year's plan.
Hoa Phat Group recognizes that in the coming time, the market will improve but not clearly because the domestic and foreign economies still face many difficulties. The Group prioritizes good management of cash flow, inventory, and production and business in accordance with the market situation. At the same time, closely follow the investment progress of large projects, especially Dung Quat 2 Iron and Steel Production Complex, ensuring effective control of projects.
When the Dung Quat 2 project is completed, the Group's steel production capacity will reach more than 14 million tons of crude steel/year, bringing Hoa Phat Group into the Top 30 largest steel enterprises in the world from 2025.
With Viglacera Corporation - Joint Stock Company (stock code: VGC), in the fourth quarter of 2023, the business had net revenue of 3.020 billion VND, down 8% over the same period, gross profit from there also decreased 21% to 565%. billions dong.
After tax deductions, Viglacera had a net loss of 48 billion VND (while the same period in 2022 had a profit of 222 billion VND). This is the first quarterly loss since the company announced the information.
In 2023, Viglacera reports net revenue of VND 13.194 billion, down 10% compared to 2022. The company's pre- and after-tax profits are at VND 1.602 billion and VND 1.162 billion, respectively, down 30% and 39% compared to 2022.
In the cement industry, Vicem Ha Tien Cement Joint Stock Company (stock code: HT1) is a large enterprise that announced its consolidated financial statements for the fourth quarter of 2023 with a decrease in net revenue from sales and service provision. 23% over the same period last year, down to 1.783 billion VND. Profit after tax reached 54 billion VND, down 6% compared to the same period in 2022.
In 2023, Vicem Ha Tien Cement's net revenue will reach more than 7.000 billion VND, down 21%. The company reported a profit of only 17 billion VND, a decrease of more than 93% compared to the level realized in 2022.
The materials industry has gone through a difficult year 2023, so the business plans for 2024 proposed by businesses are quite cautious.
For example, Vicem Ha Tien Cement aims to produce about 2024 million tons of clinker in 17,03, an increase of 3% compared to 2023.
Total consumption of cement and clinker is about 24,31 million tons, an increase of 7,7%; Of which, domestic cement consumption is about 18,57 million tons, growing 5,3% compared to 2023, total revenue is about 29.814 billion VND, down 1,2% compared to 2023.
Regarding the steel industry, a representative of Hoa Phat Group said that 2024 will be the start-up year for the steel industry after hitting bottom in 2023. The market will begin to recover from 2025. The Group plans to increase steel output this year by over 10% with expectations of consumption growth at the same level.
Analysts recognize that in 2024, the construction materials industry has high expectations for efforts to promote public investment. From the last months of 2023 to early 2024, the Government has been drastically directing the promotion of public investment. Many key transport infrastructure projects have been implemented, along with the approval of many industrial and urban infrastructure projects.
