Vinatex Chairman: Orders pile up after US postpones tax, profits increase by nearly 200%

On the afternoon of June 20, Vietnam Textile and Garment Group (Vinatex) announced its production and business results in the first 6 months of the year.

Mr. Le Tien Truong, Chairman of Vinatex Board of Directors, said that in the first 6 months of the year, the group's revenue and profit growth rate was quite good at 8% and the country's textile and garment export turnover was 11%, when many businesses had good revenue.

Good profit because of increasing orders, high value

Vinatex's results report for the first 6 months of the year shows that consolidated revenue is estimated at VND 9,035 billion, equal to 49% of the annual plan and 108% of the same period in 2024; consolidated profit is estimated at nearly VND 556 billion, equal to 61% of the annual plan and 197% over the same period.

According to Mr. Truong, the profit growth rate is better than revenue due to better prices and improved efficiency. Orders are prepared earlier due to better global market demand. Inventory is lower and the ordering trend is clear, there is no longer a situation where orders are "broken up" by small, short orders. The ordering trend is back to the previous period, 2-3 months earlier, so there is more initiative.

In particular, according to Mr. Truong, after April 9, when the US announced the postponement of reciprocal taxes, demand for orders was overwhelming, with some orders even requiring immediate delivery in July.

Therefore, the number of orders increased and the orders were large, the demand was longer. This was the reason why Vinatex's profit increased by nearly 200%.

Compared to the same 6 months of normal years, it only accounts for 40% of the year's profit. Also because this is the period with Tet holiday, May 1 holiday (equivalent to 15 days to 1 month of working days).

This is also the period of making light goods, summer so the value is low. However, the efficiency of the first 6 months of this year has increased quite well, despite the special context.

High hopes for tariff negotiations

As Vietnam continues to negotiate reciprocal tariffs with the US, Mr. Truong said that both customers and manufacturers are continuing to negotiate prices. Although there is no final result or negotiation result of tariffs increase or decrease, the parties "still have to meet" to negotiate orders.

"No matter what, we still have to produce in July, so we have to plan for orders to be placed from June. In August and September, the rate of receiving goods may vary based on negotiations and tariff results. If we wait for tariff results to negotiate orders, we will miss the beat. Production in these months is for winter and Christmas. Therefore, if we insist on safety now and wait for results, it will be more difficult, affecting trust in the chain," said Mr. Truong.

Forecasting the results of tax negotiations, Mr. Truong said that through information on the results of technical negotiations, tariffs for Vietnam and the textile industry may not be too high. Therefore, it is expected that orders from now until the end of the year will maintain growth of 8-10%.

"No matter the context, 13,000 Vietnamese textile and garment enterprises will take advantage of it. If a bad situation happens, it will be less bad, if a good situation happens, they will try to do better" - Mr. Truong shared and expected this year's consolidated profit to be 950 - 1,000 billion VND.