Textile enterprises ‘shrink’ both profits and labor

The export groups of over 5 billion USD of our country all decreased compared to the same period last year, the textile and garment industry fell the most. Corporate profits in the industry are thinning.

Lack of orders, revenue and profit decline

Data from the General Statistics Office shows that the situation of orders in April is still difficult. This is reflected in the export turnover of goods in April, down 7.3% from the previous month, reaching 27.54 billion USD. Accumulating 4 months, the country’s export turnover reached 108.5 billion USD, down 11.8% over the same period in 2022 (equivalent to a decrease of 14.5 billion USD).

Scarcity of export orders, all 5 groups of exports over 5 billion USD of our country (phones and components; footwear; electronics, computers and components; machinery and equipment; other tools and spare parts) all recorded a decrease of 5.9 – 19.3% over the same period last year. In which, the export value of textiles and garments dropped the most by 19.3%, to $9.571 billion.

In the above context, the business results of many enterprises in the textile and garment industry went backwards. Century Yarn Joint Stock Company (STK) said that in the first quarter of this year, the company’s sales and average selling price were lower than the same period last year because customers narrowed the order size. Financial, selling and administrative expenses have been reduced over the same period, but profit before and after tax still cannot be improved.

In the first quarter of this year, STK’s net revenue decreased by 352 billion dong, equivalent to 55% compared to the same period last year. Gross profit decreased by 94 billion dong, equivalent to 84% of the same period. Profit after tax almost completely “evaporated”, with a decrease of nearly 98% (VND 74.6 billion), to VND 1.6 billion.

At Song Hong Garment Joint Stock Company (MSH), Q1 revenue fell 51%, and profit “evaporated” 67%. The reason was the decrease in orders, while input costs increased. Sales and service provision of MSH reached 637 billion dong. After tax, profit decreased to 27.3 billion dong, while the same period last year was nearly 82 billion dong.

Thanh Cong Textile – Investment – Trading Joint Stock Company (TMC) reported a 26% decrease in profit in the first quarter. TCM recorded a net revenue of VND 876 billion and net profit of VND 55 billion, down 22% and 26% respectively compared to the previous quarter. same period.

Big “bulge” loss

In the first three months of the year, Garmex Saigon Joint Stock Company (GMC) lost 20.6 billion dong after tax, up 154% over the same period last year (loss 8.1 billion dong). Revenue dropped by 94%, only 7.9 billion in the first 3 months of the year. GMC said that revenue in the first quarter dropped sharply due to the lack of orders, small orders, small quantities, and low unit prices.

Last year 2022 was also the first year this garment business reported a loss. After the audit, GMC lost nearly 85 billion dong.

GMC said that in 2022, businesses will mainly produce outsourcing orders. From mid-August 2022, enterprises have to suspend production in some factories to improve quality, most of the goods must be stored. In the fourth quarter of 2022, enterprises received processing orders in small quantities, competitive prices, low productivity, so revenue decreased significantly. Revenue for the whole year of 2022 decreased by more than 72% over the same period.

With a heavy loss for the whole year of 2022, GMC changed from accumulated profit of more than 233 billion dong to a cumulative loss of more than 19 billion dong. Stocks have been put under warning since April 11. Regarding overcoming the warning stock situation, GMC said that the business is continuing to rebalance its personnel to suit the new situation. Orders were difficult, in the first quarter of 2023, businesses were forced to narrow their operations. GMC said it will review the assets, look for opportunities to rationally exploit the existing premises, or liquidate the assets that are not in use. The business is expected to be profitable in 2023, but it has not yet been able to overcome the accumulated loss on the financial statements

In the first quarter of the past quarter, the situation of businesses cutting orders continued, leading to hundreds of thousands of workers having their working hours reduced and losing their jobs. In the first three months of the year, according to data from the General Statistics Office, the whole country had nearly 150,000 workers lost their jobs, nearly 300,000 people were laid off. More than 55% of unemployed workers are in the textile industry.

According to Viet Linh/Tien Phong