How do businesses adjust their business plans under the impact of Covid-19?

An Tien Industries benefits positively from the upward trend of plastic resin prices. Source: Internet.

On November 10, An Tien Industries Joint Stock Company held an extraordinary General Meeting of Shareholders (AGM) to discuss the adjustment of business targets in 2021. According to the report of the Board of Directors (Board of Directors) An Tien Industries Joint Stock Company, the target of total consolidated revenue will increase from VND4,000 billion to VND7,000 billion. Consolidated profit after tax was also adjusted to increase from VND70 billion to VND90 billion, up by 75% and 29%, respectively.

By the end of the third quarter of 2021, An Tien Industries' consolidated net revenue reached VND5,508 billion, up sharply by 88% over the same period in 2020; profit after tax reached VND79 billion, up 88%. With this result, the company exceeded 38% of the revenue target and 13% of the profit after tax target approved at the Annual General Meeting of Shareholders at the beginning of the year.

Along with the adjustment of business targets, An Tien Industries also plans to increase the dividend payout ratio from 10-15% according to the previous plan to 20%.

An Tien Industries is a large plastic additive manufacturer with products serving the domestic market and exported to more than 50 countries and territories. In a recent report, Stanley Brother Securities (SBSI) said that the price of plastic resins recovered from June 2021 due to the sudden increase in demand for plastic packaging in Southeast Asia during the Covid-19 pandemic and is expected to remain stable until the end of the year.

Accordingly, the average price of plastic resins this year is 30-45% higher than in 2020. This is a very positive signal for businesses dealing in plastic materials such as An Tien Industries. On that basis, SBSI forecasts that An Tien Industries' profit will double in 2020, reaching VND106 billion.

The Board of Directors of Vietnam Container Joint Stock Company (VSC) has just agreed to adjust the business targets for 2021. In which, this company still maintains the revenue plan for 2021 set out at the beginning of the year at VND1,700 billion, but raised the pre-tax profit target to VND445 billion, an increase of nearly 33% compared to the previous plan. According to the Board of Directors of VSC, this adjustment is based on the results of production and business activities in the first nine months of 2021 and the actual market situation.

Accordingly, the company achieved very positive business results in the first nine months of 2021 with revenue and pre-tax profit of VND1,386 billion and VND358 billion, respectively, up 13% and 49% compared to the same period in 2020.

Thus, compared to the adjusted plan, VSC has completed nearly 82% of the revenue plan and 80% of the full year profit plan.

Benefiting from the demand for studying and working online, the consumption of laptops, tablets, office equipment of Digital World Joint Stock Company (Digiworld) recorded very strong growth, helping the company record revenue in the third quarter of 2021 of VND3,825 billion, up 5.5% on the basis of the already high results of the third quarter of 2020 (VND3,624 billion). Profit after tax in the period also increased by 43%, reaching VND107 billion.

In the nine months of 2021, Digiworld earned VND13,050 billion in net revenue and VND330 billion in profit after tax, up 53% and 96% respectively over the same period last year. This result also helps the company complete 86% of the revenue plan and exceed 10% of the full year profit plan.

As a result, the company raised its full-year revenue target to VND19,225 billion and profit to VND500 billion, up 26% and 67% compared to the previous plan. With this plan, Digiworld has completed 68% of revenue target and 66% of profit target. Enterprises are confident to complete the new targets set out when the last months of the year are the time when Apple, Xiaomi, and Huawei launch key products.

Meanwhile, securities is the industry with the most companies adjusting to increase business targets with names like Agriseco, APG securities, VNDirect, SmartInvest.

Positive movements of the stock market and strong participation from new investors have brought impressive revenue and profit growth results for securities companies. By the end of the third quarter of 2021, many securities companies have achieved profits many times higher than the same period last year.

Contrary to the joy of the above enterprises, when discussing raising production and business plan targets, many other enterprises have seen poor production and business results from the beginning of the year. Many businesses are forced to adjust a series of revenue and profit targets to match the actual situation.

Ben Thanh Service Joint Stock Company (BTSC) has just lowered its revenue target by 20% compared to the original plan, to VND11 billion in 2021; expected profit is zero while the old plan was VND1.8 billion.

BTSC's management said that the company's business activities were affected by the Covid-19 pandemic and the setting up of provisions for joint ventures and associates led to a decrease in revenue and profit. According to the company's financial report for the third quarter of 2021, by the end of the third quarter of 2021, net revenue was VND5.9 billion, down nearly half compared to the same period last year. Profit after tax was negative VND230 million, while in the same period last year it was VND1 billion. Particularly in the third quarter of 2021, BTSC net lost VND292 million due to the impact of social distancing measures, leading to a decrease in revenue.

Nam Viet Joint Stock Company also adjusted down 13% of the revenue target and 44% of the profit target compared to the original plan, back to VND3,900 billion and VND250 billion.

The production and business situation of Nam Viet has faced many difficulties since the beginning of the year due to the outbreak of the Covid-19 pandemic, the sea freight rate has continuously increased along with the high price of raw materials for food production.

In the financial statements of the third quarter of 2021, Nam Viet recorded a net loss of VND13 billion. The reason is due to the decrease in revenue when the number of workers decreases when implementing the "3 on-site" option, leading to a decrease in sales volume. Selling expenses also increased by 73% over the same period last year, mainly due to freight costs and transportation costs. The costs of “3 on-site” services are high such as: food costs, Covid-19 testing costs and facilities to serve employees who stay at the company.

In nine months, Nam Viet has only reached VND74 billion in profit after tax, down 36% over the same period last year.

Similarly, many other enterprises have also announced the adjustment of business targets due to the impacts of the Covid-19 pandemic such as Saigon Real Estate Joint Stock Company, HUDLAND Real Estate Investment and Development Joint Stock Company, and HIPT Group Joint Stock Company.