Listed firms worry about dollar appreciation
VietNamNet Bridge - While the dollar appreciation brings great benefits to exporters and enterprises which have earnings in dollars, it has caused importers and manufacturing enterprises to suffer because the enterprises have to pay more to import materials for domestic production.


vietnam economy, business news, vn news, vietnamnet bridge, english news, Vietnam news, news Vietnam, vietnamnet news, vn news, Vietnam net news, Vietnam latest news, Vietnam breaking news, dollar appreciation, VND, SBV

Vietnam has been urged to devaluate the dong



The H2 finance report of the Vietnam Airlines Corporation had net revenue of VND23.145 trillion, an increase of 20 percent over the same period last year and net profit of VND374.3 billion, or five times higher.

The impact of the dong/dollar exchange rate was very clear in the report of Vietnam Airlines, which has both receipts and expenses in foreign currencies. 

The air carrier recorded profit of VND300 billion from the exchange rate fluctuation in the second quarter, but the loss because of the exchange rate fluctuation was also high, VND838 billion, or 3.5 percent of revenue. 

As such, in the first five months of the year, the losses due to exchange rate fluctuation amounted to VND1.181 trillion.

While the dollar appreciation brings great benefits to exporters and enterprises which have earnings in dollars, it has caused importers and manufacturing enterprises to suffer because the enterprises have to pay more to import materials for domestic production.

Meanwhile, the Airports Corporation of Vietnam (ACV), also being an enterprise in the aviation sector, but made fat profit of VND400 billion from the dollar appreciation because its receipts were mostly in dollars. 

The exchange rate fluctuation has also had big impacts on the textile & garment industry which collects foreign currencies from exports, but has to pay foreign currencies for material imports.

Viet Tien Corporation reported the revenue of VND2.751 trillion and profit of VND127 billion in the first half of the year. Besides, it could pocket the profit of VND13.5 billion from the dollar price increase.

The Q2 finance reports of many companies also showed that loss from the exchange rate fluctuation ate into their profits. PV Power Nhon Trach 2, for example, incurred a loss of VND11 billion because of the two loans in US dollar and Euro. 

Meanwhile, it made a profit of VND165 billion the same period last year. 

According to Ho Ngoc Yen Phuong from the national oil and gas group PetroVietnam, exchange rate fluctuation is the major risk for the companies in the field. For PetroVietnam’s subsidiaries which have the huge transaction value of $5-7 billion a year, the impact is very high.

Phuong said the 2 percent exchange rate fluctuation would be big enough to cause the loss/profit of VND1.8 trillion.

A series of other companies have reported exchange rate-related losses. These include Ha Tien 1 Cement (VND1.3 billion), Dong A Plastics (VND514 million) and Thieu Nien Tien Phong Plastics (VND400 million).

An HSBC recent report showed that most finance directors blamed the exchange rate fluctuation on their companies’ profit decreases. The surveyed businesses said exchange rate fluctuations are the type of risk they are least prepared to deal with, even if the risks are preventable.


RELATED NEWS

US weak-dollar policy to have impact on Vietnam economy

Exchange rate no problem for Vietnam


Kim Chi

vietnam economy, business news, vn news, vietnamnet bridge, english news, Vietnam news, news Vietnam, vietnamnet news, vn news, Vietnam net news, Vietnam latest news, Vietnam breaking news, dollar appreciation, VND, SBV
 
*
*
*
  Send