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Business "plunged", Vietnam's textile and garment industry set expectations for year-end shopping

The third quarter of 2023 financial reports of 29 textile and garment enterprises showed that only 3 enterprises increased profits, 8 enterprises suffered losses and 18 enterprises decreased profits. Behind this index are thousands of workers in the textile and garment industry who have lost their jobs. Recovery of textiles and garments is expected at the end of the year when the shopping season arrives.

Difficulties continue to surround workers in the textile industry

The overall picture of the business situation in the third quarter is gradually improving when businesses in turn announce their financial reports for the quarter. The textile industry continues to be one of the most difficult sectors.

According to data from the Vietnam Textile and Apparel Association (Vitas), by the end of September 2023, Vietnam's textile and garment exports reached 29.7 billion USD, down 14% over the same period in 2022. Export turnover achieved more than 74% of the target of 40 billion USD. The lack of orders continues to be a factor hindering the growth momentum of the industry, especially export enterprises.

Of the 29 textile and garment industry enterprises announcing business results for the third quarter of 2023, only 3 enterprises increased profits, 18 enterprises decreased profits and 8 enterprises reported losses.

Since then, the labor market - textile jobs have been significantly affected. Reduced income and even job loss are common in most textile and garment enterprises.

Take a look at the business results of some textile and garment enterprises

GMC: From nearly 2,000 people, cut down to 37 people

One of the "giants" in the textile and garment industry, Garmex Saigon Joint Stock Company (stock code: GMC, HOSE), was most heavily affected when it once had a total revenue of thousands of billions and a profit of several dozen to more than hundred billion dong. From 2022 until now, GMC has lost the 5th consecutive quarter.

Profit developments over the quarters at Garmex Saigon Joint Stock Company

Profit developments over the quarters at Garmex Saigon Joint Stock Company
Source: Summary of financial reports

In the first 9 months of the year, GMC only achieved a mere 8.2 billion VND in revenue, far exceeding the figure of 275.2 billion VND in the same period. As a result, profits continued to grow "negatively" to 44.1 billion VND.

Explaining the reason, the business leadership said that in the third quarter of 2023, the company had no orders, and all revenue came from services. GMC has reduced costs but the land rental price has increased, contributing to further losses.

The company has rebalanced personnel and narrowed operations to suit the new situation.

Looking at the total number of employees at Garmex, it shows that the company currently has only 37 people left. Compared to 1,982 people at the beginning of the year, the business has cut 1,945 people.

GIL lost nearly 20 billion VND in the third quarter

Sharing the fate of "negative profits", Binh Thanh Production, Trading and Import-Export Joint Stock Company (stock code: GIL, HOSE) announced a loss of 19.7 billion VND in the third quarter of this year, down more than 110% compared to the same period last year. period is 128.2 billion VND. This is the third consecutive quarter of losses at GIL.

In addition, GIL has also cut nearly 530 employees in the past 9 months.

The reason for profit fluctuations, the company stated, was that production activities in the third quarter encountered difficulties when orders decreased, causing revenue to decline; At the same time, real estate activities are still in the process of building infrastructure, so costs for this segment have increased sharply.

GIL has also cut nearly 530 employees in the past 9 months.
Source: Summary of financial reports

EVE reduced profits by 91%.

Not following in the footsteps of losses like GMC and GIL, Everpia Joint Stock Company (stock code: EVE, HOSE) led the group with the strongest decline with a 91% decrease in profits over the same period. Profit is less than 4 billion VND - 3.7 billion VND, this is the lowest level in the past 14 quarters.

Song Hong Garment (MSH) cut nearly 500 people

Song Hong Garment Joint Stock Company (stock code: MSH, HOSE) recorded a decrease in revenue of 26.7% over the same period. Although selling costs and business management costs have decreased significantly, 36% and 28.2% respectively, financial costs have increased about 2.5 times. As a result, compared to the same period, profit decreased sharply from 111.3 billion VND to 51.2 billion VND.

In terms of personnel, compared to the beginning of the year, the enterprise has 11,533 employees after cutting 470 people.

Signals from 3 "bright spots" in the textile industry

"Bright spots" appeared in 3 businesses reporting profit growth, most of which came from cutting business management costs.

Viet Thang Corporation - Vicotex (stock code: TVT, HOSE) had a strong rebound with a 160% increase in profit in the quarter compared to the same period, to nearly 2.6 billion VND. This number is thanks to the fact that businesses have aggressively cut staff costs.

May 10 (stock code: M10, UPCoM) has also reduced sales costs and corporate management costs, specifically, costs for management staff and sales staff have decreased by 33% and 12%, respectively. 6% over the same period. As a result, profits increased by 27%, reaching nearly 32 billion VND, the second-highest level in history.

Profit fluctuations in the third quarter of 2023 at 3 businesses reporting profit growth

At Tien Son Thanh Hoa Group (stock code: AAT, HOSE), profits grew by 7.2% despite a decrease in revenue, reaching VND 654.6 billion thanks to cutting business management costs. In particular, salary costs for employees decreased by 38.5%.

The textile and garment industry has shown many signs of recovery, receiving many expectations that it will recover in the fourth quarter due to increased shopping demand at the end of the year and will continue to be promoted in 2024, but there are new signs. only at a narrow margin and there are still many challenges to face.

(Theo Phu nuViet Nam)


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