Workers at a textile factory. VITAS said six-month textile exports reached 22.3 billion USD. (Photo: vneconomy.vn) According to the Vietnam Textile and Apparel Association (VITAS),textile exports hit around 22.3 billion USD in the first six months of theyear, up 17.7% compared to the same period last year.
Vietnam National Textile and Garment Group (Vinatex) made anafter-tax profit of 573 billion VND (25 million USD) in Q2, up 49%compared to Q2/2021.
The firm attributed the rise in profit to its high volume ofcotton in storage, which resulted in low production costs amid mountingcotton prices.
TNG Investment and Trading JSC followed suit with a revenue ofnearly 2 trillion VND and after-tax profit of 87 billion VND, up 35.7%and 42.3% year-on-year, respectively.
Phong Phu Corporation was another firm that came out well inQ2. It raked in over 160 billion VND in profit, surpassing the figure inQ2/2021 by 11%.
Although many firms were riding high in the second quarter, someothers saw their profits eroded by rising costs.
Thanh Cong Textile Garment Investment Trading JSC earned just 55billion VND in Q2, down 6% against Q2/2021. The company said higher overheadsand exchange rate fluctuations cost it over 75 billion VND, eating into itsprofits.
The situation was not better for the Century Synthetic FiberCorporation as the company saw a fall of 2% in profit due to soaring financialcosts. The costs ballooned from 320 million VND to over 15 billion VND, drivingits profits down to 69.4 billion VND.
Hanoi Textile Garment JSC ran unprofitably as it incurred higherfinancial costs and elevated costs of sales. It made a loss of 5.4 billion VNDin Q2, a stark contrast to the profit of 6.2 billion VND in the same periodlast year.
VITAS said the outlook of Vietnamese textiles is not veryoptimistic in the second half of the year as the risk of COVID-19 resurgence isstill high.
On top of that, many of Vietnam’s commercial partners havebeen tightening up their preventive measures against COVID-19, fuelling thesituation.
Rising inflation in textile-importing countries, coupled with theprolonged Ukraine-Russia conflict, would continue to push up materials and fuelprices, adding around 25% to textile firms' bills and eroding theirprofits.
The securities firm SSI forecast that textile firms wouldfare worse financially in the last six months of 2022 and early 2023.
It is the case because rising costs, including labour, materialand logistic costs, and the possible downturn of the US economy, a majortextile importer, are expected to wear away their earnings.
Viet Dragon Securities believed that textile demand would fallduring the rest of year as consumers have begun to tighten theirbelts and cut back on non-essential products.
It forecast that domestic textile firms would have to compete morevigorously for input materials and sale contracts during the period. Bigfirms are more likely to fare better profit-wise since they have a solidcustomer base./.
VNA
