Reports on business results of tire companies showed that the recovery momentum was maintained in the last quarter of 2020.
One of the driving factors for the growth in revenue of businesses in this industry is the effective EVFTA, which has opened up opportunities to increase exports for Vietnamese goods. At the same time, the US-China trade war has partly brought Vietnam market expansion opportunities.
That the government reduced registration fees for domestically produced or assembled cars by 50% has boosted demand for cars in the last quarter of the year, providing more favorable business conditions for tire manufacturers in the fourth quarter.
Reports on business performance for the fourth quarter of 2020 of three major domestic companies in the tire manufacturing sector including Sao Vang Rubber JSC
(SRC), Southern Rubber Industry Joint Stock Company (Casumina)
and Danang Rubber JSC
(DRC) have shown positive results.
As for Sao Vang Rubber Joint Stock Company
, its revenue in the fourth quarter more than doubled that in the same period in 2019, reaching 724 billion VND. Profit after tax also increased by 40% to 29 billion VND.
According to the company, due to the increase in deposit interest and other income from the technology development fund, the company recorded an increase of nearly 9 billion VND in profit after tax.
The better business performance of the fourth quarter than the previous quarters helped the company achieve revenue of 1,353 billion VND, profit after tax of 74 billion VND, an increase of 46 percent and 80 percent, respectively. This is also the highest result in the past 10 years of operation of the company.
Thus, by the end of 2020, Sao Vang Rubber had exceeded 48% of the revenue plan and 340% of the after-tax profit target.
Despite not recording high growth in business results like Sao Vang Rubber, Da Nang Rubber JSC had a net revenue of 1,108 billion VND for quarter IV / 2020, which is an increase of nearly 15% compared to the beginning of the year.
Cost of goods sold in the quarter increased by 12%, lower than the revenue growth, thereby improving the gross profit margin by nearly 20%.
As a result, the company reported a profit after tax of 109 billion VND, a 35% year-on-year increase.
In 2020, Da Nang Rubber recorded revenue of 3,647 billion VND and profit after tax of 257 billion VND, decreasing by 5% and increasing 2%, respectively, compared to 2019. In general, the business achieved 84% of the revenue target and fulfilled 114% of the pre-tax profit plan.
Southern Rubber Industry Joint Stock Company did not record the same growth as the two companies mentioned above in the fourth quarter after having recorded strong growth in the third quarter.
This company's net revenue remained at the same level as that in the same period last year. However, after deducting expenses and corporate profits, it reported a profit after tax of 26 billion VND, which is 24% lower than the same period in 2019.
However, for 2020, Casumina's net revenue reached 4,692 billion VND, profit after tax was 87 billion VND, which is an increase of 10% and 67%, respectively, compared to 2019. With this result, this company could only achieve 94% of revenue plan and 72% of pre-tax profit target for 2020.