The rubber industry is the most profitable
Facing difficulties from the Covid-19 epidemic in 2020, Vietnam Rubber Industry Group (HoSE: GVR) still recorded positive business results with net revenue increasing 7% to 21,116 billion VND and Profit after tax increased by 32% to VND 5,076 billion. This is the group’s record revenue and profit from 2013 to the present.
The above result is a significant contribution from the sudden growth of the rubber industry (rubber products). Income from this segment is more than double that of the previous year, reaching VND 2,166 billion, contributing more than 10% of the group’s revenue.
Meanwhile, the main business segment exploiting natural rubber latex only recorded 12,714 billion VND, accounting for 60% of total revenue (compared to over 64% in 2019). The wood processing segment also reduced revenue to 3,390 billion VND. The real estate and infrastructure construction segment has sideways revenue.
In terms of pre-tax income (profit excluding financial activities and other income), the rubber industry contributed the largest profit with nearly 786 billion VND. Profits from real estate and infrastructure also increase when industrial zone companies have positive results such as Nam Tan Uyen Industrial Park, Thong Nhat, Vinaruco, Binh Long …
Meanwhile, profit from rubber latex dropped sharply to 735 billion VND, profit from wood and electricity in 2020 also dropped deeply. This downside result is due to the rubber and wood prices in early 2020 falling to the bottom when the Covid-19 epidemic broke out, before a gradual recovery towards the end of 2020.
Currently, there are units in the rubber industry such as VRG Khai Hoan JSC specializing in the production of medical gloves branded VGlove (often misspelled as VGloves), Rubico manufacturing various types of shoe soles, Geru Star Sports Company specializing in sports equipment, Dorufoam specializing in the production of mattresses with Dong Phu brand, Ben Thanh Rubber produces conveyors and courroie wires, VRG Sado specializes in rubber thread … In addition, the group also wants to close the rubber production chain when it is planning to acquire tire tattoo companies under Vinachem.
In which VRG Khai Hoan is a major beneficiary of the sudden need for disposable medical gloves when the outbreak of Covid-19 outbreaks occurs. This company recorded last year revenue of more than 1,800 billion and pre-tax profit of 448 billion. Currently, the group holds 51% of the capital in this unit.
VRG Khai Hoan JSC currently has a competitive advantage as the only medical glove factory that has the relevant conditions and licenses to export to America and Europe. The company said that although operating at full capacity of 210 million gloves / month, it still cannot meet the demand from partners and dealers. The company has received full orders for 2021 and part of 2022; At the same time, it also planned to build a factory to produce more than 5 billion units/year, double the current capacity.
Collected 2,000 billion VND from divestment
One of the factors that helped the group’s profit soar in the past year is the income from divestment of a series of member companies. Interest from selling investments in the past year reached VND 2,056 billion, significantly higher than the profit of VND 24 billion in 2019.
The most notable deal was the divestment of 9.34 million shares of Saigon VRG Investment (UPCoM: SIP) at the end of last year, helping the group to record revenue of more than 1,300 billion dong. Currently, GVR still has about 1.4 million SIP shares, the stock dividend waiting for return.
In the past year, the group also divested all eight other investments, namely Rubber Construction Investment Company, Investment Consulting and Construction Company, Ho Nai Industrial Park, Urban Construction Consultant, Rubber Industrial Park. Vietnam, 715C Coffee One Member Limited Company, Saigon – Hanoi Securities, Saigon – Hanoi Investment Fund Management, Vietnam Tiger Fund.
In addition to divesting joint ventures, the group also sold most of its trading securities such as shares of SCJ, KBC, ITA, ACB, and SHB with a total cost of 5.6 billion dong. The remaining securities are Real Estate MB and Kim Tu Thap New Industry Joint Stock Company.