February 18, 2025

 

Vietnam's livestock businesses exit two hard years towards profitability

 

 

Livestock businesses in Vietnam strongly rebounded in 2024 following two challenging years due to the high prices of pork and significantly reduced feed costs compared to previous periods.

 

The domestic livestock sector experienced a hard period in 2022-2023, especially in the second half of 2023, when prices fell below ₫50,000 ($1.98) per kilogramme. Farmers and businesses struggled to make a profit, with some even facing losses.

 

However, in 2024, pork prices rebounded strongly to around ₫65,000 (US$2.57) per kg. By the end of the year, driven by seasonal demand for pork for the Lunar New Year (Tet), prices rose to ₫68,000-69,000 (US$2.69-2.73) per kg, or even ₫71,000-72,000 (US$2.81-2.85) in some regions. As a result, numerous livestock businesses reported significant profits.

 

Dabaco Group, a major player based in the northern province of Bac Ninh, announced a consolidated revenue of ₫13.57 trillion (US$537 million) in 2024, up 22.5% compared to 2023. Its gross profit margin increased from 9.9% to 14%, and after-tax profit hit ₫769 billion (US$30.43 million), 30.8 times higher than the previous year. The company attributed its improved performance to high hog prices, stable feed ingredient prices (both domestic and imported), controlled livestock diseases, farmers' efforts to restock herds, and higher feed consumption.

 

BAF Vietnam Agricultural JSC set a record since its listing on the HoSE as BAF with a post-tax profit of ₫324 billion (US$12.82 million) in 2024, 10.7 times higher than the previous year. While its revenue only increased by 7%, the cost of goods sold decreased by 1%, improving its gross profit margin from 6.6% to 13.2%.

 

BAF noted that the pork market last year saw prices rise to above ₫60,000 (US$2.37) per kg, with a trend approaching ₫70,000 (US$2.77). The company's pork production volume also nearly doubled compared to the previous year, thanks to a continuous expansion strategy.

 

Moreover, the cost of raw materials for animal feed production decreased compared to earlier periods and remained at a lower level, helping reduce production costs and increase livestock efficiency. Additionally, the company gained some extra profits from selling a plot of land on Ho Chi Minh City's Mai Chi Tho street recorded in the first quarter.

 

Hoa Phat Group also had a successful year in agriculture. Its agricultural segment generated more than ₫7.08 trillion (US$280.2 million) in revenue, up 12% year-on-year, and ₫1.04 trillion (US$41.16 million) in after-tax profit, over five times higher than in 2023. Its poultry segment also saw positive results, with egg production reaching 330 million eggs, and the company's egg distribution network expanded to over 100 supermarkets across the country.

 

Masan MeatLife JSC (MML), a subsidiary of retail giant Masan Group, officially ended its losses after three years of selling its animal feed business to focus on livestock. According to its consolidated financial statement for Q4/2024, the company, which owns the MEATDeli brand, recorded ₫7.65 trillion (US$302.73 million) in revenue, up 9.6% year-on-year, thanks to growth in its chilled and processed meat segments. Its gross profit margin rose from 14.3% to 25.6%, thanks to optimised production costs, especially in its poultry farms, and reduced feed costs. Therefore, the company turned a loss of ₫540 billion (US$21.37 million) into a profit of ₫25.3 billion (over US$1 million).

 

According to a recent report by Tien Phong Securities (TPS), Vietnam's livestock industry is set for a major reshuffle in 2025-2026, creating opportunities for large businesses to make systematic investments.

- The Investor