At its recent 2023 Review Conference on Party Work and Business Operations, executive leadership of Vietnam Rubber Group - Joint Stock Company (stock ticker GVR - HoSE) unveiled its business guidance for 2024.
Accordingly, Vietnam Rubber Group targets 2024 consolidated revenue and other income of VND 24,999 billion and pre-tax profit of VND 4,104 billion, each up over 2% against estimated 2023 figures. Meanwhile, targeted net profit after tax is planned at VND 3,437 billion, largely flat compared to 2023.
Specifically, for the core rubber division, GVR targets harvested rubber production of 445,200 tons and commercial sales of 520,490 tons (inclusive of external third-party procurement); average selling price of rubber latex is budgeted at roughly VND 34.6 million per ton; rubberwood harvesting will cover 6,430 hectares.
For the wood processing segment, comprising sawn timber, finger-joint boards, refined wood products, and MDF boards, GVR plans total output volume of 1.2 million m³.
For the industrial park development segment, the group aims to lease out 245 hectares of industrial land in 2024, equivalent to 468% of 2023 estimated realizations.
According to appraisals by multiple financial institutions, global natural rubber benchmark prices have bottomed out and are mounting a solid cyclical recovery. This recovery is poised to support superior operational earnings for Vietnam Rubber Group in coming periods.
Presently, compared to the trough extending from Q3-2022 through Q2-2023, world natural rubber prices have gained approximately 20%, powered by dual catalysts: supply contraction and rebounding demand.
On the supply front, severe flooding and depressed operating margins prompted Thai smallholders to curtail output by approximately 10% in 2023 compared to 2022. Thailand currently supplies approximately 30% of global natural rubber output. This supply tightening trend is projected to persist as profit margins from alternative agricultural cash crops like durian and coconut prove far more attractive than natural rubber latex.
Conversely, global rubber demand in 2024 is projected to expand significantly, driven primarily by China. The Chinese government has rolled out economic stimulus packages for the year, including strong support for automotive manufacturing. This is expected to trigger a significant uptick in tire consumption, directly pulling natural rubber prices higher. China remains the dominant destination, absorbing 98-99% of total Vietnamese rubber exports.
Additionally, projected high benchmark crude oil prices in 2024 will keep synthetic rubber production costs elevated, thereby consolidating and reinforcing the price floor for natural rubber.
Source: Tapchicongthuong
