Industrial parks forecast lower profits due to COVID-19
Industrial park owners are forecasting a drop in 2020 profits, blaming the ongoing damage inflicted by the COVID-19 pandemic.
Industrial park owners are forecasting a drop in 2020 profits, blaming the ongoing damage inflicted by the COVID-19 pandemic.
The Dong Nai-based Industrial Urban Development JSC No 2 (D2D) expects post-tax profit to slump by 51.5 percent year-on-year to 178.7 billion VND (7.7 million USD).
D2D also estimates that revenue this year will fall by 49 percent to 414 billion VND.
In 2019, D2D recorded net revenue of 763 billion VND and post-tax profit of 368.5 billion VND, 2.7 and 4 times higher than in 2018, respectively.
The company attributed the sudden slump to the investment efficiency of the Loc An KDC project in Long Thanh district.
Sonadezi Long Thanh Holding Company (SZL), also in Dong Nai, has revised its revenue target in 2020 to 409 billion VND, down 4 percent year-on-year, and post-tax profit of 87 billion VND, down 16 percent compared to 2019.
Sonadezi Long Thanh has authorised its board of directors to adjust its business plans to match the complicated developments of COVID-19. However, shareholders will need to be advised if the targets fall by more than 30 percent.
Tin Nghia Industrial Park Development JSC (TIP) expects its revenue to reach 166 billion VND, down 24 percent against 2019, and pre-tax profit to touch 93 billion VND, down 19 percent year-on-year.
TIP said this year the company will face difficulties regarding slow and complicated administrative procedures, higher costs for compensation and site clearance, and less FDI due to COVID-19.
SONADEZI Chau Duc Shareholding Company (SZC) has also forecast post-tax profit of 115 billion VND, down 14 percent.
The COVID-19 pandemic is becoming increasingly complicated, SZC’s Board of Directors said, and that the company’s investment attraction will be negatively affected.
In 2020, revenue from industrial land leasing, factory leasing, management fees and industrial infrastructure services is estimated at 282 billion VND. The company is also continuing the construction of the Chau Duc Urban Industrial Park and Golf Course.
Higher profit
Among the industrial park operators suffering the severe impacts of the pandemic, some still expect a higher profit in 2020.
Phuoc Hoa Rubber JSC (PHR) has forecast total revenue of 2.46 trillion VND, an increase of 52 percent, and pre-tax profit of 1.15 trillion VND, double the figure in 2019.
The board of directors at PHR said it would respond to each specific scenario during the COVID-19 pandemic.
The company will also restructure projects it has invested in, including Truong Phat Rubber JSC and Phuoc Hoa Kampong Thom Rubber Development Co Ltd.
According to Viet Dragon Securities Co, PHR’s industrial parks were located in the most favourable locations in Binh Duong province so rental rates are expected to remain high, at around 60-80 USD per metre square in Tan Binh and 90 USD per metre square in Nam Tan Uyen.
Rental demand is expected to continue to increase as FDI in Vietnam, and in particular Binh Duong province, is still rising, making the industrial zone segment a key driver for PHR.
However, these comments were made by VDSC before the COVID-19 pandemic.
Vinh Phuc Infrastructure Development (IDV) aims to earn 264 billion VND in revenue, and 151.6 billion VND in post-tax profit, up 62 percent and 54 percent, respectively, compared to 2019.
Remarkably, thanks to the large profit made by its subsidiary VPID Ha Nam, IDV’s revenue and profit in Q1 reached 109 billion VND and 60.6 billion VND, respectively.
These earnings in Q1 fulfilled nearly half of the target set for 2020.
This year, IDV plans to increase investment attraction at the Chau Son Industrial Park, and focus on expanding the Khai Quang Industrial Park and developing new industrial park projects.
Source: VNA
