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Vietnam firms expect modest growth due to Covid-19

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Representatives of Vietnam’s top 500 most profitable companies this year at the award ceremony. VIETNAM REPORT/VIET NAM NEWS

Vietnam firms expect modest growth due to Covid-19

Through the two waves of the Covid-19 pandemic, confidence in 2020 growth prospects among Vietnamese enterprises has gradually diminished.

This information was released by Vietnam Report (VNR) at the award ceremony of the Top 500 most profitable companies in Vietnam this year, so-called Profit500, held in Hanoi on Friday.

VNR’s survey results this year show that only 54.1 per cent of enterprises were optimistic about the revenue growth prospects and 49.1 per cent of enterprises were confident about profit growth prospects, down by 27.9 per cent and 29.9 per cent, respectively, compared to the assessment of revenue and profit growth prospects surveyed by VNR in September 2019.

The survey results show how the pandemic has seriously damaged the market sentiment.

Speaking at the ceremony, Pham Anh Tuan, a representative from online newspaper VietNamNet, said that for the first time in economic history, there was an economic crisis on a global scale stemming from a pandemic.

Tuan said this is the first time the concept of a “new normal” has been introduced when talking about efforts to recover the economic, social and production environment of the business community.

“In that context, for businesses, profit is not enough, but it must be sustainable profits based on strong internal capabilities, flexibility to adapt to the market and a reputable brand, trusted by many customers and investors,” Tuan said.

The honoured businesses are those with effective and sustainable production and business activities as well as good profitability in the face of many challenges resulting from the pandemic. In addition, they have kept a firm position in their industry and have the potential to become pillars for the future development of Vietnam’s economy.

In this year’s Profit500 ranking, some industries continued to record more businesses than the average level, including construction, construction materials and real estate (23.9 per cent), finance (11.6 per cent), food and beverages (10.9 per cent), and electricity (6.3 per cent).

Return on assets (ROA) of enterprises in Profit500 reached 11.4 per cent, slightly down from 11.9 per cent last year. However, the average return on equity (ROE) increased by 21.7 per cent compared to 20.9 per cent last year. This shows that the efficiency in using capital of enterprises has been improved.

Notably, the number of businesses in the food-beverage-retail-packaging industry this year also dominated the ranking. In this event, VNR also announced the Top 10 prestigious enterprises in the food-beverage-retail-packaging industry with the aim of recognising the achievements of reputable companies in the industry.

In a quick survey of enterprises in the industry conducted by the company in August, about half of surveyed firms said that their operations had been affected, of which, the group of alcoholic beverages was facing the most challenges because of Decree 100. Production capacity of the beverage group currently only operates at 80 per cent compared to before the pandemic.

Also under the event, VNR published the Vietnam Earnings Insight 2020 Bilingual Report with the theme “Restructuring – Recovering growth momentum in a new normal period”.

According to the report, Vietnam’s economy recorded a growth rate of 2.12 per cent in the first nine months of 2020 – the lowest compared to the same period of 2011-2020. However, in the current difficult situation, maintaining a positive growth rate is still considered a positive and good sign.

The challenge for Vietnamese businesses is not only to maintain production and business activities and ensure social safety regulations, but also to build a suitable operating system following market trends.

Vietnam’s top 10 most profitable companies this year are – Vietnam Oil and Gas Group (PetroVietnam), Samsung Electronics Thai Nguyen Co Ltd, Military Industry and Telecom Group (Viettel), Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), Honda Vietnam, Vingroup JSC, PetroVietnam Gas Joint Stock Corporation (PV GAS), Vietnam Bank for Agriculture and Rural Development (Agribank), Vietnam Technological and Commercial Joint Stock Bank (Techcombank), Vietnam Dairy Products JSC (Vinamilk).

VIET NAM NEWS/ASIA NEWS NETWORK

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