Earnings Insight

Earnings Insight
4Q2023 Corporate Earnings Insights: Strong earnings but underlying revenue needs to improve

Q4 2023 earnings continued to improve from the low point set in Q4 2022. Total net profit (1,130 companies as of Feb 5th) increased +35.3% YoY and +4.8% QoQ, reaching the highest point in the past 5 quarters. Thus, YoY growth materialized after 4 consecutive quarters of contraction. Cumulative earnings decreased -3.5% YoY for FY2023. FY2023 earnings level remained high at about the same as FY2021 and 36% higher than FY2019, i.e pre-Covid level.

Sector-wise, main growth drivers include: Banks (+25% YoY), Food & Beverage (+52% YoY), Construction & Materials (+162% YoY), and IT (+31% YoY) all w/ strong recovery of earnings. Materials, and Financial Services turned around from negative earnings last year, while Travel & Leisure still experienced losses, though significantly tapered from previous periods. Gross profit margins improved substantially for Financial Services, Materials, Food & Beverage, Construction, and Travel & Leisure, signaling that these sectors have bottomed out and earnings growth has resumed pace gradually.



3Q2023 Corporate Earnings Insights: Longer road to recovery

Q3 earnings of Vietnamese listed companies were quite unimpressive, as total revenue was almost unchanged while net profit declined by a less steep degree YoY.

Total revenue aggregated across all listed companies (1,096 stocks as of November 1st) slightly declined by -0.6% YoY and -0.1% QoQ, only -8.8% lower than the peak level recorded in Q4 2022, and much higher than the pre-2022 period.

Total net profit after tax declined -5% YoY after three consecutive quarters of double-digit decreases, partly because of fading high base effect (peak earnings recorded in Q1 and Q2 2022). On the QoQ basis, net profit declined by -3.5% QoQ after two quarters of increasing earnings. Cumulatively, in 9M23 net profit declined by -15.8% YoY.

Gross profit margin (non-Financial sectors) improved to 16.8% in 3Q23 from 15.4% in 3Q22, the highest level since last year. However, net profit margin squeezed to 5.9%, as both sales expenses and interest expenses sharply increased.


2Q2023 Earnings Insights: Earnings bottom is in sight

Q2 earnings season has come and gone with little surprise, in which 19.8% of companies incurred losses and 34.8% of companies recorded a reduction in earnings (data as of Aug 11). Of all listed companies that already released Q2 figures, total revenue and total NPAT continued to decline -3.9% YoY and -12.8% YoY, though the pace of decrease has decelerated compared to two previous quarters.

Please note that total earnings growth were significantly supported by the Banks sector and Vin Group, if excluding these companies, NPAT would decline -32.7% YoY.

Profitability keeps deteriorating across the board, except for Financial Services and Health Care sectors. High financial costs and weak demand have led to many companies scaling down business activities, with deleveraging undertaken across many sectors.