How did SMC return to profit?

According to its newly released Q4 2025 financial statements, SMC Investment Trading JSC (HoSE: SMC) recorded a sales volume of more than 91,000 tonnes of steel products, generating VND 1.638 trillion in revenue, down 25% year-on-year. Gross profit reached VND 9.1 billion, a sharp turnaround from a gross loss of VND 25 billion in the same period last year.

In the final quarter of 2025, the steel company’s other income surged to nearly VND 223 billion, compared with a loss of VND 50 billion a year earlier, primarily due to the disposal of land-use rights and assets belonging to two subsidiaries.

As a result, net profit after tax for Q4 2025 reached VND 344 billion, a sharp increase from VND 5.3 billion in the same quarter of 2024. The main drivers were the liquidation of inefficient assets and the recognition of reversals of provisions for doubtful receivables during the period.

According to the company, Vietnam’s steel industry showed more positive signs in 2025 after a difficult year in 2024. Domestic demand was the main growth driver, supported by public investment and infrastructure projects. The real estate market also showed more encouraging signals compared with previous years, boosting demand for construction steel. In addition, domestic steelmakers benefited from protective and anti-dumping measures against low-priced imported steel.

For the full year 2025, SMC recorded a total steel sales volume of 443,638 tonnes, completing 71.6% of its annual volume target. Consolidated revenue reached VND 7.007 trillion, down 21.5% year on year, while net profit after tax rose to VND 185 billion, a sharp increase from just over VND 12 billion in 2024. With these results, the company achieved 74% of its revenue target and six times its profit target for the year.

Despite the improvement, company management noted that while core business operations improved in the final quarter of 2025, they remain challenging and have yet to deliver sustainable efficiency.

Specifically, throughout 2025, SMC continued to address persistent challenges by comprehensively restructuring its business operations and resolving slow-moving receivables. The proactive downsizing and exit from inefficient business segments—including steel pipe galvanizing and equipment manufacturing—led to further declines in production and revenue compared with 2024.

During 2025, SMC carried out the transfer of assets and machinery and restructured operations at its subsidiaries. These transactions significantly reduced operating costs, supported profitability, and helped gradually correct capital imbalances.

At the same time, the company intensified efforts to recover overdue receivables across the system, particularly those linked to the Novaland customer group. Improvements in sales management, production techniques, and the renegotiation of terms with suppliers and customers contributed to better operating efficiency in Q4 2025. As a result, SMC successfully eliminated its accumulated losses, moving from a negative VND 140 billion in 2024 to a positive balance of nearly VND 28 billion in 2025.

Looking ahead to 2026, company leadership acknowledged that challenges and uncertainties remain. Nevertheless, SMC plans to continue its aggressive restructuring and recovery strategy, focusing on strengthening management capacity, accelerating digital transformation, and improving core operations—particularly in steel processing and trading.

The company also aims to expand higher-margin steel businesses and specialized steel products serving the oil and gas and chemical sectors, deepen participation in FDI supply chains, and provide high-quality steel products for manufacturers of electronics, home appliances, automobiles, and motorcycles. At the same time, SMC will continue to restructure and divest inefficient assets and operations to optimize resources.