Why are rubber industry enterprises' profits so high in the first 6 months?

Sao Vang Rubber records profits

Sao Vang Rubber Joint Stock Company (code SRC - HoSE floor) has just announced its second quarter financial report with a sudden increase in profit - setting a record since listing as well as in its operating history.

In the second quarter alone, Sao Vang Rubber's sales revenue reached VND335 billion, up 18% over the same period. Improved profit margins helped gross profit increase by 16%, reaching nearly VND47 billion.

Pre-tax profit reached VND114 billion, many times higher than the figure of more than VND6 billion in the same period. Return on equity (ROE) in the second quarter jumped to 24.6%, while it was only a few percent in previous quarters.

Accumulated in the first 6 months of 2024, Sao Vang Rubber recorded net revenue of VND 503 billion, an increase of 5% over the same period. Profit after tax was VND 117 billion, nearly 12 times higher than the first half of 2023. This is also the company's highest profit since listing (2009).

At the 2024 Annual General Meeting of Shareholders, the company set a target of VND 2,000 billion in revenue and VND 78.2 billion in profit. The profit target has exceeded the set plan, but there is still a long way to go to complete the revenue plan.

In the second quarter alone, Sao Vang Rubber's sales revenue reached 335 billion VND, an increase of 18% over the same period.

As of June 30, 2024, Sao Vang Rubber's total assets reached VND 1,157 billion, down 14% compared to the beginning of the year.

Liabilities 1.14 times equity

Regarding the financial situation, as of June 30, 2024, Sao Vang Rubber's total assets reached VND 1,157 billion, down 14% compared to the beginning of the year.

The largest proportion in the company's asset structure is investment in associated companies with VND 505 billion, accounting for nearly 45%.

Of which, Sao Vang Rubber invested 130 billion VND into Sao Vang Hoanh Son Company Limited and 375 billion VND into Sao Vang Hoanh Son Joint Stock Company.

At the end of June 2024, Sao Vang Rubber's liabilities were 617 billion VND, 1.14 times higher than its equity (541 billion VND).

Total debt is about 168 billion VND, mainly short-term debt with 165 billion VND from banks in USD and VND. In the first 6 months of this year, Sao Vang Rubber had to pay nearly 8 billion VND in interest.

At the end of June 2024, Sao Vang Rubber's liabilities were 617 billion VND, 1.14 times higher than its equity (541 billion VND).

Previously, Sao Vang Rubber Joint Stock Company recorded revenue of only over VND 181 billion in the first quarter of 2024, down 13.3%; profit after tax of VND 3.3 billion, down 17.4% over the same period last year. Profit decreased due to decreased revenue, while there was no other income like the same period last year (VND 1.35 billion).

Sao Vang Rubber shared that the company still faces many difficulties with fierce competition from domestic and foreign tire products, the trend of converting car tires from bias to radial and tubeless motorcycle tires gradually replacing tube tires. Meanwhile, the company has not been able to produce radial car tire products, while tire products are not diverse and abundant and output has not met market demand.

To implement the 2024 business plan, Sao Vang Rubber said it will be determined to develop new, high-quality products, especially large-size construction vehicle tires, tubeless motorcycle tires, and butyl rubber motorcycle tubes.

At the same time, the Company strengthens brand promotion, develops sales policies suitable for each industry and each region to maintain and develop consumption of products with strengths in the domestic market, striving to achieve and exceed revenue plans set for each month, quarter and year.

In addition, Sao Vang Rubber will restructure its distribution system in some northern and southern provinces.

Source: https://danviet.vn/vi-sao-loi-nhuan-6-thang-cua-doanh-nghiep-nganh-cao-su-cao-dot-bien-20240722143541438.htm