Before being transferred from the State Capital Management Committee back to the Ministry of Agriculture and Rural Development , Vietnam Forestry Corporation - JSC (Vinafor; HNX: VIF) was a leading enterprise in terms of profit in the wood industry, earning thousands of billions each year...
Five corporations and general companies arranged by the State Capital Management Committee at Enterprises will be handed over to the Ministry of Agriculture and Rural Development, including: Vietnam Rubber Industry Group (VRG), Southern Food Corporation (Vinafood 2), Northern Food Corporation (Vinafood 1), Vietnam Forestry Corporation (Vinafor) and Vietnam Coffee Corporation (Vinacafe).
How was the business situation of these 5 enterprises before they were assigned to the specialized Ministry for management? Dan Viet would like to "name" each enterprise.
Lesson 3: Bright color scheme for Vinafor
Vietnam's wood industry has achieved positive results in the first 11 months of 2024, with wood and forestry product exports estimated at 15.62 billion USD, up 19.8% over the same period last year. This achievement shows the industry's strong recovery after a year full of fluctuations and difficulties. In the third quarter of 2024, Vietnam Forestry Corporation (Vinafor, HXN: VIF) alone contributed more than 29% of the industry's total profit, reaching 105.5 billion VND, up 58%...
Vinafor - Top profitable enterprise in the wood industry...
According to information from the Forestry Department (Ministry of Agriculture and Rural Development), in the first 11 months of 2024, wood and forest product exports are estimated to reach 15.62 billion USD, up 19.8% over the same period last year. Specifically, wood products reached 10.09 billion USD, raw wood reached 4.58 billion USD, and non-timber forest products reached 0.95 billion USD.
The report also said that the trade surplus in the first 11 months of the year reached 13.11 billion USD. With this strong growth momentum, it is estimated that wood and forestry product exports for the whole year of 2024 will reach over 17.2 billion USD, an increase of 18.9% compared to 2023, exceeding the plan set for 2024 by 13.1%.
Key export markets including the US, EU, Japan and Canada all recorded growth, with the US accounting for more than 50% of Vietnam's total wood and wood product export turnover.
These advantages have been reflected in the business picture of wood enterprises. Of the 15 wood enterprises on the stock exchange that announced their financial reports for the third quarter of 2024, 9 enterprises increased their profits, 2 enterprises decreased their profits, 2 enterprises returned to profit and only 2 enterprises reported losses.
Total revenue of these enterprises reached nearly VND 4,770 billion and net profit VND 360 billion, up 9% and 42% respectively over the same period in 2023. Gross profit margin fluctuated around 20%.
In terms of absolute value, in the third quarter, Vinafor alone contributed more than 29% of the industry's profit, reaching VND105.5 billion, up 58%. Vinafor said that although the third quarter did not generate revenue and profit from real estate transfer activities as in the same period, the market in some other fields showed signs of recovery. In addition, the company generated revenue from divesting subsidiaries of about VND25 billion, while management costs decreased by VND23 billion, contributing to increased profits.
Going into each of Vinafor's main business segments, revenue from selling raw wood materials accounted for more than half of total revenue in the third quarter, reaching VND200 billion (down 7%), however, the gross profit margin of this segment was thin at only 1.7%. Meanwhile, service provision is the most profitable segment, achieving a gross profit margin of 53.5%, followed by selling planted forests at 39%; selling finished wood products at 26.2%; selling artificial boards at 16.5%....
Previously, in the second quarter of 2024, Vinafor also led in profits in the wood industry. In the first 6 months of the year, consolidated pre-tax profit was estimated at VND 224 billion, consolidated after-tax profit was estimated at VND 214 billion. In 2024, with the wood and wood products export market gradually recovering, Vinafor set a target of consolidated revenue for the entire Corporation reaching nearly VND 2,000 billion; after-tax profit reaching VND 317 billion. Thus, the company has exceeded its profit target for the whole year after 3 quarters.
As of September 30, 2024, Vinafor's total assets were VND5,399 billion, down from VND5,475 billion at the beginning of the year. However, liabilities decreased compared to the beginning of the year, to only VND437.2 billion compared to VND494.7 billion, mainly short-term debt of VND360.5 billion and long-term debt of VND76.6 billion.
Maintain annual revenue of thousands of billions from forest and timber exploitation
Vinafor, formerly known as Vietnam Forest Products Corporation, was established under Decision No. 667/QD/TCCB dated October 4, 1995 of the former Ministry of Forestry on the basis of merging 10 Corporations and Unions of Enterprises under the former Ministry of Forestry. By 2016, Vietnam Forestry Corporation - Joint Stock Company officially operated, with main business lines related to production and business of planted forests and forestry varieties, afforestation and forest exploitation, timber exploitation, production of finished products from wood...
During the period 2012 - 2023, Vinafor maintained a revenue of thousands of billions each year (except for 2016). In 2023 alone, Vinafor's revenue reached 1,685 billion VND, of which total revenue from forest exploitation, wood trading and wood products reached approximately 1,280 billion VND. Profit after tax reached 276 billion VND.
On the other hand, Vinafor has a tradition of paying dividends regularly and in cash. Since 2017, the company has maintained dividend payments to shareholders at a rate of 6-20%. In early August, Vinafor paid 2023 dividends to shareholders at a rate of 9.21% (1 share received 921 VND), equivalent to spending more than 322 billion VND.
The shareholder structure shows that the State Capital Management Committee at enterprises still holds 51% of the capital, equivalent to nearly 18 million shares; in addition, T&T Group holds 40% of the capital, equivalent to 14 million shares. Thus, the dividends received by the two major shareholders are VND164 billion and VND129 billion, respectively.
2024 is not yet the “golden time” for the wood industry. However, the opportunity to expand and develop market share is considered quite large. The world furniture market is estimated at about 405 billion USD/year; the demand for imported wood and wood products is 230 billion USD while the export turnover of these items of Vietnam only accounts for more than 6%, there is still a lot of room.
With positive export figures, Vinafor said that orders for wooden furniture at the end of 2024 grew well compared to the beginning of the year, and 2025 is forecast to see many good signals, including the re-election of US President Donald Trump, which could open up many advantages for Vietnam.
Investors expect that with Mr. Trump's policy of imposing high tariffs on goods from China, the opportunity to export Vietnamese wooden furniture to the US will increase in the near future; at the same time, there will be a trend of shifting orders to Vietnam thanks to the advantage of cheaper raw materials and production costs.
However, Vinafor also acknowledged that the wood industry is still facing many difficulties due to the market's increasing demands for sustainability and environmental friendliness. Vietnam's main wood export markets such as the EU, the US, Japan, and South Korea still face difficulties due to product protection policies, strict implementation of regulations on illegal timber accounting, and regulations on deforestation and forest degradation of the European Union (EUDR)...
In addition, the world situation continues to have geopolitical conflicts, complex and unpredictable fluctuations; the impact of high sea freight rates leading to increased prices of imported raw wood, causing output prices to increase. In addition, the shortage of containers and limitations in the logistics system also increase difficulties in the process of transporting goods.
In the US, a market that accounts for more than 54% of the industry’s total export value, businesses are facing successive trade defense lawsuits and pressure from the US not recognizing Vietnam as a market economy. In the EU, the EU Deforestation Regulation (EUDR) requires exporting businesses to comply with strict regulations on product origin and the environment.
Northeast Asian markets such as South Korea and Japan are also adopting new measures that increase costs and risks for exporters. South Korea has decided to continue imposing anti-dumping duties on Vietnamese plywood, while Japan has implemented a carbon credit trading system with strict regulations on emissions.
In fact, in 2024, Vinafor tried to overcome difficulties and basically completed many tasks, promoted existing resources to achieve some positive results. The profits achieved were greatly contributed by member units which are LLCs, Vinafor's affiliates with foreign enterprises...
Vinafor said it will effectively and practically implement tasks and solutions and strive to achieve the highest goals stated in the Corporation's Development Strategy for the period up to 2030, with a vision to 2035; production, business and investment development plan up to 2025 approved by the General Meeting of Shareholders.
Vinafor is currently actively promoting innovation, aiming at research and application of science and technology in afforestation, forest exploitation and forestry seed production; enhancing forest value in all aspects from production, timber trading, forest environmental services and forest carbon credits.
Mr. Phi Manh Cuong - Chairman of the Board of Directors of Vinafor affirmed that Vinafor will maximize all resources to strive to complete and exceed the planned targets for this year and 2025.
Mr. Phi Manh Cuong also affirmed: In the coming time, Vinafor will continue to strengthen monitoring and grasping the situation at member units to promptly guide and direct, and remove difficulties for units in the context of difficult consumption market and high costs of raw materials.
Vinafor will have support policies to stabilize production and business activities and ensure the lives and incomes of workers at wood processing units in all cases.
At the same time, Vinafor directed its affiliated forestry units to implement measures to speed up exploitation progress, clear forest planting sites, reclaim encroached land and prevent new encroachments.
Vinafor's Board of Directors will coordinate with the Executive Board to continue implementing the Corporation's Information Technology Development Project; complete the Carbon Credit Business Project; at the same time, continue to promote trade promotion activities, international cooperation; trade in imported raw wood and some new products.
According to Plan 141/KH-BCĐTKNQ18 of the Steering Committee for the Summary of Resolution 18/2017/NQ-TW, 19 State-owned corporations and groups under the State Capital Management Committee (Super Committee) will be re-arranged into specialized ministries.
The Ministry of Agriculture and Rural Development (MARD) manages 5 enterprises: Southern Food Corporation (Vinafood2), Northern Food Corporation (Vinafood1), Vietnam Forestry Corporation (Vinafor), Vietnam Rubber Group (Vietnam Rubber Group), and Vietnam Coffee Corporation (Vinacafe).
Source: https://danviet.vn/suc-khoe-5-tap-doan-tong-cong-ty-nong-nghiep-truoc-khi-ve-lai-bo-vinafor-doanh-nghiep-lai-top-dau-nganh-go-20241228231201226.htm
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