The profits of the four major furniture giants in Vietnam have plummeted, and orders may further decrease in the second quarter of 2023
According to a report by Vietnamese media on May 17th, four major furniture manufacturers in Vietnam, Phu Tai, An Cuong, Truong Thanh, and Duc Thanh, reported a sharp drop in profits in the first quarter of this year due to reduced orders.
Phu Tai JSC’s after tax profit for the first quarter was 62.4 billion Vietnamese dong (approximately 19 million RMB), a year-on-year decrease of 57%. The company is listed on the Ho Chi Minh City Stock Exchange (HoSE) with quarterly revenue of 1.41 trillion Vietnamese dong (approximately 422 million yuan), a year-on-year decrease of 18%.
The company stated that the decrease in revenue was due to inflation in the European and US markets, which affected the purchasing power of the local market. The real estate market in Vietnam has been declining since the second quarter of 2022, which has also affected its business performance.
The profits of the four major furniture giants in Vietnam have plummeted, and orders may further decrease in the second quarter
An Cuong announced an after tax profit of 36.3 billion Vietnamese dong (approximately 11 million yuan) and a revenue of 680 billion Vietnamese dong (204 million yuan), with two data points decreasing by 70% and 20% respectively. The company’s goal for this year is to achieve a revenue of 5 trillion Vietnamese dong (1.498 billion yuan), an increase of 11.7%, and a profit after tax of 668 billion Vietnamese dong (approximately 200 million yuan), an increase of 8.5%.
The company (ACG) stated that due to the complex economic situation in Vietnam and internationally, consumers are cautious in their consumption, and due to the expansion of the company’s distribution system, costs and expenses have increased, resulting in a decrease in profits compared to the same period last year.
Another furniture giant, Truong Thanh Furniture Corporation, reported an after tax profit of 1.8 billion Vietnamese dong (approximately 540000 yuan), a year-on-year decrease of 90%. The quarterly revenue was 331 billion Vietnamese dong (approximately 100 million yuan), a decrease of 38%.
Duc Thanh’s revenue was 60 billion Vietnamese dong (approximately 18 million yuan), a decrease of 44%, and its after tax profit was 7.5 billion Vietnamese dong (approximately 2.2 million yuan), a decrease of 63%. In 2023, the company’s goal is to achieve revenue of 520 billion Vietnamese dong (approximately 156 million yuan) and post tax profit of 83 billion Vietnamese dong (25 million yuan), an increase of 30% and 20% respectively.
The profits of the four major furniture giants in Vietnam have plummeted, and orders may further decrease in the second quarter
Do Yuan Lap, Chairman of the Vietnam Wood and Forest Products Association, said that due to the sharp decline in global purchasing power, the world economy is facing difficulties and challenges, resulting in a significant decrease in the number of orders in the Vietnamese furniture industry compared to the same period in 2022.
According to Lap, the main export market for the country’s furniture industry, the United States, has experienced a sharp decline in order demand, directly affecting the overall export performance. Starting from 2022, many companies are searching for customers in new markets such as Japan, China, and South Korea to offset the decline from the US market.
