Posted on 09 Apr 2009
Steel firm says profit may fall 31 percent as orders drop
Hoa Phat Group Joint Stock Co., Vietnam’s biggest steel producer, said it expects 2009 profits to fall 31 percent as orders decline amid a global economic slowdown.
Net income may decline to VND585 billion (US$33 million) from VND851 billion last year, Vu Ngoc Thuy, a spokeswoman for the Hanoi-based company, said. Sales may drop 26 percent to VND6.3 trillion, she added.
“The global economic crisis may continue to reduce demand,” Thuy said.
The global recession has hurt demand for steel from manufacturers and builders, prompting mills in China, the biggest maker, to cut prices and push exports. Steel consumption in Vietnam fell more than 20 percent in the first quarter as higher interest rates and a slowing economy hurt the construction industry, Pham Chi Cuong, chairman of the Vietnam Steel Association said on March 26.
Baoshan Iron & Steel Co., China’s biggest steelmaker, said product prices will stay at “low levels” in the second quarter as mills have not cut production fast enough to cope with the drop in demand.
