Vietnam's livestock enterprises impacted by dipping live pig prices in first nine months of 2023
The decline in Vietnam's live pig prices have caused livestock enterprises to record less positive business results in the third quarter of 2023 as well as in the first nine months of the year, a local media outlet reported.
After increasing sharply to ₫64,000-65,000/kg in early July, the price of live pigs had decreased to ₫54,000-55,000/kg (US$2.21-2.26) by the end of the third quarter of 2023. By the end of October, the price of live pigs continued to go down in some localities where it was only ₫47,000-50,000/kg (US$1.93-2.05).
In the last quarter, BAF Vietnam Agriculture Joint Stock Compay recorded a revenue net revenue of ₫1,219 billion, down 36% over the same period. The business's net profit declined sharply, reaching only ₫39 billion (US$1.6 million), a 75% drop over the same period. In the first nine months of this year, BAF recorded ₫3,625 billion in net revenue and ₫51 billion (US$2.1 million) in profit after tax, down 26% and 82%, respectively, over the same period.
After a big profit of ₫327 billion in the second quarter, Dabaco Vietnam Group Joint Stock Company achieved a profit of approximately ₫12.5 billion (US$533,000) in the third quarter of 2023, down 94% over the same period, while net revenue decreased by 24% to ₫2,709 billion. The company's gross profit margin decreased from 13.6% in the third quarter of 2022 to 10.4% in the third quarter of this year due to animal feed costs remaining at a high level.
Having accumulated in the first nine months of 2023, Dabaco's profit after tax was ₫18.6 billion (US$779,000), down 92% over the same period, while net revenue reached ₫8,496 billion, down 9%.
Hoang Anh Gia Lai Joint Stock Company recorded a revenue growth rate of up to 31% in the third quarter with ₫1,889.3 billion, but its revenue from selling pigs reached ₫3 billion (US$123,000), down 9% over the same period. The company's third quarter profit after tax was ₫320 billion (US$13.1 million), down 11% over the same period.
Following the first three quarters of the year, Hoang Anh Gia Lai brought in ₫5,034.2 billion in net revenue, ₫702.2 billion (US$29 million) in profit after tax, an increase of 45% in revenue but a 21% drop in profit over the same period.
Vietcombank Securities Company (VCBS) recently forecast that pork prices will remain low before increasing slightly again in early 2024. Lunar New Year in Vietnam is usually the time when pork consumption is in demand. Pork demand is likely to increase more conspicuously in January nexy year.
According to Vietnam's Deputy Minister of Agriculture and Rural Development, the demand for pork and poultry will increase gradually by the end of the year. However, African swine fever (ASF) remains a major threat to the domestic pork supply.
Based on estimates, BAF's pig output in 2023 will reach about 370,380 pigs, bringing a net revenue and gross profit of ₫2,787 billion and ₫268 billion (US$11 million), respectively. Next year, when the company completes its farm expansion plan, it is expected that its pig sales will reach 676,380 heads.
It was also forecast that BAF's net revenue this year will reach ₫7,090 billion, a slight increase over the same period. It is expected that the company's net revenue and profit after tax can increase by 16% and 166%, respectively, next year when compared to 2023.
As for Dabaco, the pig farming segment could bring ₫4,383 billion in revenue this year for the company.
Dabaco's business results were expected to improve in the medium and long term thanks to the commercialisation of its ASF vaccine. The company's vaccine factory could be ready for mass production by the end of the fourth quarter this year.
By cooperating with Guangdong Winsun Bio Pharmaceutical, Dabaco's ASF vaccine has the opportunity to reach the Chinese market and, more broadly, other countries with a pig production sector.
It was forecast that Dabaco's net revenue will reach ₫12,510 billion, an increase of 8.24% over the same period.
This year, Hoang Anh Gia Lai plans to plant 2,000 hectares of corn to produce animal feed. This can support the company's gross profit margin in the pig farming segment.
Previously, Hoang Anh Gia Lai used bananas to produce food for pigs, helping to save about 40% of its animal feed costs. This year, the company plans to produce 300,000 pigs, an increase of 2% compared to 2022.