The gloomy period of Nam Kim Steel

The end of 2022 witnessed the gloom of the Vietnamese steel industry when the price of input materials increased, causing many units to record a gross loss of billions of dong. In particular, Nam Kim Steel (Code: NKG) also went through a difficult period with a loss of hundreds of billions of dong each quarter.

From Q3/2022 to Q1/2023, Nam Kim Steel recorded 3 consecutive quarters of negative profits. The recorded losses were VND419 billion, VND356 billion and VND49 billion, respectively.

In the second quarter of 2023, the company improved its operations, revenue grew strongly to VND 5,500 billion and started to make a profit again with VND 125 billion. In the following two consecutive quarters, Nam Kim Steel recorded a decrease in revenue, with after-tax profit only reaching a symbolic VND 24 and 22 billion.

In 2023, Nam Kim Steel lost 107 billion VND from business operations and 125 billion VND after tax.

Revenue and profit recovery in the first 6 months of the year

The steel market is gradually recovering in the first half of 2024, and Nam Kim Steel's revenue and profit are also gradually growing again.

In the first quarter of 2024, NKG recorded net revenue of VND 5,291 billion, profit after tax reached VND 150 billion while in the same period it was still losing VND 49 billion.

In the second quarter of 2024, Nam Kim Steel recorded net revenue of VND 5,661 billion, net profit from business activities recorded VND 272 billion, nearly 1.5 times higher than the same period.

Of which, financial revenue doubled over the same period, reaching 114 billion VND. Financial expenses decreased by half, to nearly 70 billion VND, with the majority being interest expenses.

Sales expenses in the period increased by nearly 40 billion VND, accounting for 251 billion VND. In return, business management expenses were reduced, to 32 billion VND compared to 40 billion VND in the same period. After deducting expenses and taxes, Nam Kim Steel earned nearly 220 billion VND in profit in the second quarter of 2024.

NKG's accumulated revenue in the first 6 months of the year reached VND 10,952 billion, profit after tax reached VND 370 billion, nearly 4 times higher than the low base of the previous year. Compared to the plan set for 2024, Nam Kim Steel has completed 109.6% of the profit plan.