AN PHAT PLASTIC (AAA): LETTER 2019 FROM CHAIRMAN
Dear Our Valued Shareholders and Investors,
As 2018 comes to a close, first and foremost, we would like to send best wishes and our sincere thanks to you, our valued shareholders and investors who have been greatly supporting AAA for the past year.
The year of 2018 saw numerous changes in the global politics and economy with countries increasing protectionism, the China – US trade dispute, and the unpredictable fluctuations of oil prices resulting in significant difficulties to companies in plastic industry. Meanwhile the Board of Management and our employees did make substantial progress in reaching the business plan set by General Meeting of Shareholders, which were:
- The consolidated revenue for 2018 is expected to reach VND 7,000 billion, exceeding the plan by 17%. Specifically, the revenue of packaging segment has risen by 40% compared to 2017’s due to Factory No. 6 and 7 operating at nearly full capacity. Our market share in the European and Japanese market has remained stable while exports to the USA is on the increase.
- Net profit for 2018 is expected to reach VND 200 billion, accounting for 60.6% of our business plan. The earnings results fell behind our plan because: 1) to ramp up utilization rate of Factory 6 and 7 that just came into operation in 2H17, we maintained stable selling price despite fluctuations in raw material prices; 2) the resin offtake contract with domestic producers was behind schedule.
2019 is likely to create both opportunities and challenges for us. The unpredictable movements in oil prices require us to seek for strategic suppliers to secure competitive raw material prices and to adjust sales policies in favor of short-term orders to mitigate the input price risk. On the other hand, the current global trade tension, specifically the China – US trade dispute, has enabled us to increase exports to the US market. Also FDI companies moving their manufacturing from China to Vietnam has fostered extensive opportunities for An Phat High Technology Industrial Park’s increasing occupancy rate.
In 2019, we expect to reach VND 7,900 billion of consolidated revenue and VND 510 billion of net profit (up 155% y-o-y), enabling the earnings per share (EPS) of VND 2,550 and the expected dividend rate of 10-15% for shareholders. The strong earnings growth will come from our great efforts to improve profit margins by optimizing product portfolio in packaging segment; the increasing occupancy rate of the industrial zone An Phat Complex; the higher profit margins in trading segment thanks to resin offtake contract as well as the profits contributed by recently launched the industrial packaging project, An Vinh, and the injection molding engineering plastic project, An Trung.
We hold the strong belief that backed by your trust, the significant steps we have made towards the strategic goals and the tireless efforts of our executives and employees, AAA will continue to strengthen the position in the plastic industry and improve shareholder returns in 2019 and the years to come. Once again, we would like to thank you all for your support and trust in us!
Chairman of the Board
Pham Anh Duong