VNDirect Securities Company believes that the export sector will be less difficult in the second quarter and gradually recover in the third quarter of 2023. Photo: H.Diu

Demand of purchasers plummeted

According to the report on socio-economic situation in April, although industrial production recovered, in general, four months decreased compared to the same period last year. Total import and export turnover of goods was estimated at US $ 210.79 billion, down 13.6% over the same period last year, in which, export decreased by 11.8%, and import decreased by 15.4%. The good news is that the country had a trade surplus of US $ 6.35 billion, while in the same period of the year only reached US $ 2.35 billion.

These difficulties of the economy were reflected in the business results of enterprises. Statistics of FiinGroup show that, with 1,013/1,679 listed enterprises and banks representing nearly 97% of capitalization on stock exchanges announcing business results in the first quarter of 2023, the total profit after tax has decreased by 26.3% over the same period last year. In which, profit after tax of the non-financial sector decreased sharply by 42.6% over the same period.

Considering the business sector operating mainly in the field of import and export, the difficulties are more obvious. At the end of the first quarter of 2023, Sa Giang Import-Export Joint Stock Company (SGC) recorded a net profit 75% lower than the same period last year, only nearly VND 5 billion. According to the explanation of SGC, the cost of products increased while the selling price in the first quarter of 2023 and production and consumption decreased, causing a sharp decrease in revenue and profit. Thus, with a profit target of VND80 billion, SGC has only achieved 6% of its profit target after first quarter.

Although exporting many products from agricultural products to minerals, Petrolimex Import-Export Joint Stock Company recorded a decrease in profit after tax of up to 97% from a profit of more than VND 1.85 billion in the first quarter of 2022 from over VND 1.85 billion to more than VND 47 million in the first quarter of 2023. This company explained the profit in the first quarter of this year dropped sharply because revenue fell by about 32% compared to the previous year in the context of the ongoing world economic recession, causing a sharp drop in purchasing demand.

Not only domestic enterprises, foreign-invested enterprises (FDI) are also expected to be heavily affected in terms of revenue when the volume of exports has decreased. According to the latest preliminary statistics of the General Department of Customs, the total import-export turnover from the beginning of the year to the end of April 15, 2023 of FDI enterprises only reached US $ 125.56 billion, down 14.2%. (equivalent to a decrease of US $ 20.7 billion). These enterprises accounted for more than 67.4% of the decrease in turnover of the whole country. In particular, these enterprises have great advantages in many key product groups such as phones and components; computers, electronic products and components; wood and wood products.

Expected recovery in third quarter

In the textile and garment sector, difficulties have been predicted since the last months of 2022. According to preliminary calculations of the Vietnam Textile and Apparel Association (VITAS), the total export turnover of Vietnam's textiles and garments in the first three months of 2023 is estimated at US $ 8.701 billion, down 18.63% over the same period in 2022.

In the first quarter of 2023, Thanh Cong Textile - Investment - Trading Joint Stock Company recorded net revenue of VND 876 billion and net profit of VND 55 billion, down 22% and 26% respectively over the same period last year. Century Yarn Joint Stock Company also only achieved a profit after tax of nearly VND1.63 billion in the first three months of the year, down sharply by nearly 98% compared to VND76.3 billion in the first quarter of 2022.

The reason given by Century Yarn is that sales and average selling prices are lower than the same period last year due to direct and indirect customers narrowing the order size. Binh Thanh Import-Export Production Trading Joint Stock Company (Gilimex) reported a loss of VND 38.61 billion in the first quarter of 2023, compared with a profit of VND 107.1 billion recorded in the first quarter of 2022, due to the decrease in sales, the company's sales revenue decreased compared to the same period last year.

However, in the context of the absence of orders and a decrease in exports, TNG Investment and Trading Joint Stock Company still maintained a revenue growth of 8% in the first four months of the year, reaching VND 1,962 billion, export revenue accounted for 98% of total revenue. The first quarter financial statement of this enterprise recorded a net profit of VND40 billion, up 5% over the same period. According to the explanation, besides the improvement of the core business, TNG recorded an additional profit of VND3.3 billion from its subsidiary TNG Land.

According to experts, it is since the second half of this year, when the market recovers, that businesses with revenue mainly from import and export can recover.

Experts at VNDirect Securities Company said that there have been positive signals from both the domestic and international markets. Purchasing Managers' Index (PMI) of Vietnam, the US and China have increased, while inflation in the US and EU is cooling down, so the export sector will be less difficult in the second quarter and recover gradually in the third quarter of 2023.

Therefore, many businesses have set a profit plan for the whole year of 2023 to decrease or increase only slightly compared to the previous year. Along with that, businesses are also trying to manage by all means such as restructuring, focusing on innovation and strengthening trade promotion activities to expand the market.