Two "giants" in the plastic industry: Input advantage has not created a breakthrough for the first quarter business

Binh Minh Plastics and Tien Phong Plastics - two large plastic enterprises have improved their gross profit margin in this quarter. Binh Minh Plastics maintained the revenue growth momentum, but in return, the cost of sales discount doubled over the same period.

Gross profit margin improved

Binh Minh Plastic Joint Stock Company (BMP code) and Tien Phong Plastic Joint Stock Company (NTP code) have just announced the first quarter of 2020 financial statements with profit after tax both growing. The profit of Binh Minh Plastic in this quarter increased by 12.4%, reaching 102 billion dong; while Tien Phong Plastic reported net profit of nearly 76 billion dong, also up by 5.6%.

The notable common point between the two businesses is that the gross profit margins have been significantly improved. Mr. Chu Van Phuong - General Director of Tien Phong Plastic said that the decrease in input material prices compared to the same period was a factor affecting this business. The widespread Covid-19 influenza epidemic had an impact on the global economy, reducing the demand for oil, leading to a sharp decline in oil prices in recent years. This factor is considered beneficial for businesses in the plastic industry in general.

However, the revenue of Tien Phong Plastic decreased 4.2% over the same period, only 959.8 billion VND. The advantage of input factors helped gross profit margin increase from 31% to 32.3% but the company's gross profit also only went flat. Interest expenses and selling expenses are reduced. Regular selling expenses accounting for more than 17% of total revenue of Tien Phong Plastic have also decreased by more than 13 billion dong over the same period.