Cement firms see strong profits in Q2, signalling a bright future for stocks

After a challenging first quarter, during which many companies recorded losses, the Vietnamese cement market has experienced a remarkable recovery, with several firms unexpectedly reporting substantial profits in the second quarter of 2025.

Việt Nam's cement sector is witnessing a significant turnaround, as several companies report impressive profits amid ongoing competitive pressures from oversupply. This resurgence is seen as a positive signal for the entire industry, especially with the anticipated boost from public investment in the latter half of the year.

After a challenging first quarter, where many companies recorded losses, the Vietnamese cement market has experienced a remarkable recovery, with several firms unexpectedly reporting substantial profits in the second quarter of 2025.

A notable example is Vicem Ha Tien Cement, which posted record profits, breaking an 11-quarter streak of poor performance. The company reported consolidated net revenue exceeding VNĐ1.93 trillion (US$73.6 million) and a remarkable net profit of over VNĐ112.3 billion, a sharp contrast to a loss of nearly VNĐ9.2 billion in the first quarter.

Despite a modest 1 per cent increase in revenue year-on-year, the company's net profit surged by 145.5 per cent, attributed to an 8.5 per cent increase in cement consumption and reduced costs due to better production cost control.

Similarly, Vicem But Son Cement JSC recorded a bright financial picture, with net revenues of VNĐ672.2 billion in Q2, a slight decline of 2.8 per cent from the same period last year.

However, the company posted a net profit of VNĐ12.4 billion, reversing a loss of nearly VNĐ40.2 billion in Q2 2024.

This turnaround was facilitated by a sharper decline in costs than the drop in revenue.

Vicem Hoang Mai Cement also reported strong results, achieving revenues of VNĐ492 billion, nearly matching last year's figures, while net profit soared from VNĐ270 million to VNĐ7.34 billion.

The company benefitted from increased selling prices, particularly for clinker, which rose by VNĐ130,000 per tonne compared to Q2 2024.

Meanwhile, VVMI La Hien Cement saw a 19.1 per cent increase in sales volume thanks to signs of recovery in the real estate market. The average selling price also rose, contributing to a 13.34 per cent increase in net profit, reaching VNĐ13.66 billion in Q2 2025.

Positive outlook

While one strong quarter does not confirm a lasting trend, the significant profits reported by these companies amid intense competition are encouraging for the cement sector.

Analysts attribute this positive outlook to several factors, including the recovery of the real estate market and robust public investment.

According to the Ministry of Construction, cement and clinker consumption reached approximately 54.5 million tonnes, marking a 14 per cent increase year-on-year.

Domestic consumption alone rose by 18 per cent, signalling a strong recovery in the domestic market. Exports also increased by 6 per cent, with around 17 million tonnes sold abroad.

With the Government's commitment to accelerating public investment and resolving project-related issues, the cement industry is expected to continue its recovery and exhibit strong growth potential in the second half of 2025, according to Trần Hiền Phương, senior director at KIS Vietnam Securities.

Large-scale projects are set to drive demand for construction materials, including cement, he added.

As the cement sector, predominantly comprising State-owned enterprises, shows signs of recovery, investors remain optimistic about potential policy support aimed at alleviating challenges within the industry.

If the sector continues to rebound, cement stocks could prove to be highly attractive, especially given their relatively low valuations.

Moreover, during prosperous business periods, companies like Vicem Ha Tien and Bim Son Cement consistently distribute dividends, making them appealing to investors seeking reliable returns.