Many steel enterprises saw profits drop by up to 90 per cent in Q2 of this year, amid plunging steel prices.
In the second quarter of this year, VNSTEEL–Thu Duc Steel JSC (TDS) recorded net revenue of VND358 billion (US$15.3 million). It suffered a net loss of nearly VND2 billion, down more than 45 per cent over the same period last year.
According to the company, the output price decreased continuously from the beginning of the second quarter until now, along with a decrease in steel consumption.
This caused the company to stop production, and the high price of steel inventory from previous months made the situation worse. This was in contrast to the second quarter of 2021 when there were supply chain disruptions and strong demand created conditions for high steel prices.
Slow consumption also affected cash flow in Q2, along with credit tightening and high-interest rates over the same period of last year also made financial costs, especially loan interest, increase sharply. During the quarter, financial expenses jumped from VND85 million to VND2.7 billion. The positive point was the reduction in selling and administrative expenses.
