Rubber industry experiences strong profit growth in 2021

Rubber is one of the industries posting good performance despite many sectors struggling due to the COVID-19 pandemic.

Workers collecting latex at a rubber plantation in Gia Lai province. (Photo: VNA)

Rubber is one of the industries posting good performance despite many sectors struggling due to the COVID-19 pandemic. 

In its fourth-quarter financial statement, Vietnam Rubber Group (GVR), one of the leading rubber companies in Vietnam, said that its net revenue rose 6.6 percent year-on-year to 9.6 trillion VND (4.2 million USD). Of which, revenue from producing and trading latex still plays a key role, with a gain of nearly 19 percent to 7.46 trillion VND. 

In addition, the wood processing segment also brought back more than 1 trillion VND in revenue. 

While other business segments recorded growth, the real estate and infrastructure businesses reported a decrease of 47 percent to 183 billion VND. 

However, as there was no longer profit from the divestment of member companies and liquidation of rubber plantations, its profit after tax in the fourth quarter of 2021 declined by 44 percent to nearly 1.8 trillion VND.

For 2021, the company’s net revenue reached 26.35 trillion VND, up nearly 25 percent compared to 2020. It resulted in a gain of 10 percent in profit after tax to 5.6 trillion VND, completing and exceeding 23 percent of the plan.

Even though Vietnam Rubber Group had the highest profit last year, Dong Phu Rubber JSC (DPR) was the one with the largest growth in terms of profit. 

Despite posting a fall of 3.5 percent over the same period of 2020 in revenue, the company’s profit after tax was still four times higher at 330 billion VND thanks to other incomes totalling more than 229 billion VND. 

Accumulated in 12 months of 2021, Dong Phu Rubber’s net revenue reached 1.2 trillion VND, up 6.8 percent on-year, with revenue from the latex business being 860 billion VND, accounting for around 71 percent of its total revenue. 

Revenue from the liquidation of rubber trees reached 122 billion VND.

Therefore, its profit after tax jumped 132 percent to 491 billion VND. The company’s earnings per share (EPS) was also in the top at 10,752 VND.

Tabiruco (RTB) is also a business witnessing strong profit growth. 

In 2021, its net revenue reached 889.3 billion VND, up 32.5 percent over 2020. With profit before tax up 3 times higher than the yearly target, the company’s profit after tax doubled to 379.6 billion VND.

Similarly, Baruco (BRR) recorded a rise of 27.2 percent in net revenue to 500 billion VND, resulting in an increase of 34.2 percent in profit after tax to 146 billion VND. With the business results, Baruco exceeds 20.5 percent of the profit target set for the whole year.

Victory is not for all 

On the contrary, Phuoc Hoa Rubber JSC (PHR), also one of the leading producers in the industry, reported a decline of 11 percent in net revenue of the last quarter of 2021 to nearly 663 billion VND, with profit after tax down 40 percent to 237.5 billion VND. 

For the whole year, its net revenue still rose by over 19 percent to 1.9 trillion VND. 

However, in 2021, as there was no other income, its profit after tax edged down 48.6 percent year-on-year to 578 billion VND.

Another name leaving a huge impact for investors last year was Quang Nam Rubber. 

Four years ago, in 2017, the company suddenly reported a loss of nearly 1.2 trillion VND, with revenue of only tens of billions of dong.

Since then, it has generated almost no revenue, or only a small amount which was less than 10 billion VND. 

In both 2020 and 2021, Quang Nam Rubber did not generate revenue, losing 65 billion VND and 50 billion VND, respectively. 

Therefore, accumulated to December 31, 2021, it lost 1.36 trillion VND, with equity down to 167 billion VND.

Last year, the company also experienced many ups and downs with changing its name and business lines twice. 

Of which, in May 2021, the company changed its name from Quang Nam Rubber to Viet Trung Viet Investment and Development JSC, and transformed its core business from planting and trading rubber to real estate.

Then, at the end of 2021, the company changed its name again to Tay Ba Na Group JSC, but kept its stock symbol of VHG.

Positive outlook in 2022

Vietnam Rubber Group said that the country’s rubber industry will benefit from both export volume and value due to tight global supplies, especially in Southeast Asia as the region is severely affected by the weather, leading to a decrease in the production of natural latex.

Therefore, the price of latex is expected to continue to rise sharply. 

A report from the Import-Export Department, under the Ministry of Industry and Trade showed that the country’s rubber price increased slightly last month./.