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Greater animal feed costs have eroded livestock firms’ income within the first quarter of 2022.
VNDirect Securities Company mentioned that the Russia-Ukraine battle had a unfavorable influence on the animal feed trade as provides of uncooked supplies for animal feed manufacturing like corn, soybeans and wheat, are disrupted, inflicting costs to rise sharply.
The 2 nations are respectively the world’s main and third largest wheat exporter, accounting for one-third of the entire commerce of this commodity. Moreover, Ukraine is the second largest corn exporter, accounting for 22 per cent of the world turnover.
As of early April, the value of imported corn at Cai Lan port, Quang Ninh Province, reached VND9,200-9,500 per kg (US$0.4-0.41 per kg), a rise of 20-25 per cent in comparison with the tip of 2021 and up 50 per cent over the identical interval final yr.
The typical value of imported soybeans within the first quarter was $637.6 a tonne, up 18 per cent year-on-year, whereas the value of imported wheat additionally elevated by 36 per cent to a mean of $363.3 a tonne.
Underneath greater feed costs stress, reside hog costs additionally posted a rise, however not considerably. The home reside pig market in March fluctuated round VND52,000-57,000 a kg, up 11-14 per cent in comparison with the start of the yr, whereas the farm-gate value of hen declined by 11 per cent. Nevertheless, in comparison with the identical interval final yr, reside pork costs fell by 23-27 per cent, whereas hen costs climbed by 19 per cent.
As a result of stress, many livestock enterprises reported a pointy lower in income and even losses. Dabaco Group (HoSE: DBC) introduced that its first quarter internet income elevated barely by 13.3 per cent on-year to VND2.8 trillion. However the sharp rise in value of products bought brought on its gross revenue to dip by 60 per cent to VND254 billion. With different bills didn’t fluctuate a lot, revenue after tax was solely VND8.6 billion, equal to 2.3 per cent of the identical interval final yr. That is Dabaco’s lowest revenue because the second quarter of 2019.
The corporate mentioned that the difficult developments of the Russia-Ukraine battle had affected the provision chain of enter supplies equivalent to corn, wheat and soybeans, inflicting a critical scarcity. The disruption of the provision chain and obstacles because of the pandemic brought on the price of animal feed to inch greater, whereas the value of livestock merchandise didn’t improve.
Equally, Hoa Phat Group (HoSE: HPG)’s agricultural phase additionally reported poor efficiency within the first quarter of this yr. Of which, income from agricultural companies fell 27 per cent over final yr to VND1.6 trillion. It misplaced practically VND56 billion, whereas within the first quarter of 2021, the agricultural phase introduced in revenue of VND392 billion.
As Masan MEATLife Company (UPCoM: MML) separated its animal feed phase, the corporate’s internet income within the first quarter dropped sharply to VND931 billion from VND4.7 trillion final yr. Nevertheless, the mum or dad firm’s revenue after tax doubled to VND274 billion because of monetary actions.
If solely taking the meat enterprise into consideration, the primary quarter’s income recorded a slight lower of 5.4 per cent because of the lower within the value of pork, whereas gross sales quantity elevated.
Accordingly, gross sales of branded pork reached VND351 billion, down 4 per cent, and income from farm pigs reached VND197 billion, down 57 per cent on account of a hunch of 25 per cent within the pork value. In the meantime, gross sales of branded hen meat (3F Viet) have been up 31.4 per cent to VND373 billion, thanked to an increase of 16.5 per cent in gross sales quantity and a leap of 13.8 per cent in value.
Masan MEATLife’s earnings earlier than curiosity, taxes, depreciation and amortisation (EBITDA) was unfavorable VND28 billion, whereas that of the identical interval final yr was optimistic VND498 billion.
The corporate’s chief mentioned that pork manufacturing has entered a steady zone within the first quarter and is anticipated to extend by the tip of the yr. Masan MEATLife goals to enhance its EBITDA, broaden companies by way of sustainable provide improvement, improve capability utilisation, convey merchandise into the WinCommerce system, and diversify its processed meat portfolio.
A report of the Ministry of Agriculture and Rural Growth mentioned that reside hog costs in areas throughout the nation in April tended to extend once more because of the reopening of eating places, faculties and factories, boosting consumption, whereas the provision decreased and costs of animal feed climbed. Rooster and egg costs additionally edged greater as client demand steadily recovered.
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