06:00 | 26/05/2022 Economy
(VEN) - Many companies achieved much better business results in the first quarter of 2022 compared with the same period last year.
Total consolidated revenue of the Vietnam National Textile and Garment Group (Vinatex) in the first quarter of 2022 reached nearly VND4.9 trillion, a year-on-year increase of 45 percent. Its pretax profit reached VND376.7 billion, up 74 percent compared with the first quarter of 2021, and equivalent to 39.6 percent of the annual projection.
|Many textile and garment companies have received orders to maintain exports until the end of the third quarter of 2022|
Vinatex attributed these results to the fact that most yarn companies of the group received orders in 2021 to maintain exports in 2022 and to the forecast about cotton price increases resulting in a large volume of low-priced cotton in stock.
In early 2022, member companies of Vinatex achieved satisfactory business results and many received orders for the first three quarters of the year.
The yarn sector so far has fulfilled 63 percent of its annual business plan. Garment companies have also received large-volume orders for key products.
The Can Tho Import Export Seafood Joint Stock Company (CASEAMEX) reported revenues of more than VND452 billion and after-tax profit of VND26.8 billion in the first quarter of 2022. In the first quarter of 2021, the company’s after-tax profit reached just over VND1 billion. The company attributed its export results to the strong economic recovery and demand for tra fish in most markets.
The net Q1 revenue of Petrovietnam Fertilizer and Chemicals Corporation (PVFCCo) reached nearly VND5.83 billion, almost double that in the same period last year, while its after-tax profit reached more than VND2.12 trillion – twelve-fold that in the first quarter of 2021 (VND179 billion).
Many companies reported highly improved business results in the first three months of 2022 compared with the same period last year. Some even saw their profits increase by more than 10 times.
Reducing dependence on imports
However, economists warned domestic companies that the global situation of the COVID-19 pandemic remains complicated. The resurgence of the pandemic in China could result in supply chain disruptions affecting manufacturing in many countries, including Vietnam.
The textile and garment sector was among those hardest hit by the outbreak of COVID-19 in 2020 and its material supply chain still suffers disruptions. Some domestic companies have invested in domestic production of materials to reduce dependence on imports. However, according to the Vietnam Textile and Apparel Association, domestic material production for the textile and garment sector remains limited.
In this context, experts have urged domestic companies to diversify the markets from which they import materials, as well as export markets. Additional policies are needed to promote support industries to gradually build up self-sufficiency in terms of input materials.
Business associations are being advised to assess the impact of China’s zero-COVID policy on domestic companies so that they can take suitable action to maintain production and retain customers.
For their part, domestic companies can find solace in the re-opening of major markets, such as the US and the EU, while Vietnam applies a policy that enables its safe, flexible adaptation and effective control of COVID-19 to promote economic recovery and development. Moreover, new-generation free trade agreements are expected to provide Vietnamese businesses with opportunities to expand their markets.